Legislation changes to superannuation from 1 July 2024

1 July 2024

In most financial years, the Government introduces or changes legislation to ensure the superannuation system remains fair, effective, and sustainable.

Understanding these changes can make a difference to how you save and grow your retirement savings. Brighter Super aims to keep you informed, helping you make smarter decisions about your future.

The latest changes to super came into effect on 1 July 2024. We’ve summarised these changes and what they could mean for you.

Increase to the Superannuation Guarantee contribution rate

The Superannuation Guarantee rate increased to 11.5% on 1 July 2024. This is the minimum percentage of a person's salary (ordinary time earnings) that their employer must pay into their super.

The requirement for employers to pay higher contribution arrangements for eligible local government employees (under the Local Government Act) did not change on 1 July 2024. Other members may also receive higher contribution rates based on enterprise agreements or individual arrangements.

This year’s increase to the Superannuation Guarantee is part of the Government’s long-term plan to increase the rate to 12% by financial year 2025/26.

Increase to contribution caps

The annual limit on how much you can pay into super increased on 1 July 2024.

Caps for both concessional (before-tax) and non-concessional (after-tax) contributions have been increased for the 2024/25 financial year – as shown in the table below.

There is no change to the bring-forward arrangements (non-concessional contributions) or carry-forward rules (concessional contributions). However, the increased contribution caps in 2024/25 could benefit people using these two flexible ways of growing super.

• Bring-forward arrangement for non-concessional contributions – eligible people aged under 67 years can make up to three years’ worth of non-concessional contributions in a single year, which for 2024/25 could now be up to $360,000.

For eligibility details, including limits for people with a total super balance over $1.66 million, refer to the Australian Taxation Office (ATO) website.

• Carry-forward unused concessional cap amounts – you may be able to carry forward any unused amounts under your concessional contributions cap into the next financial year. These carried-forward amounts will expire after five years.

For eligibility details, including having a balance less than $500,000 at the end of the previous financial year, refer to the ATO website.

For further information, refer to our info sheet on contribution caps or the ATO website.

You can also read our latest article on how to supercharge your super balance with additional contributions.

Increase to income thresholds for Government co-contributions

The lower and higher income thresholds for the Government’s super co-contributions increased on 1 July 2024. The maximum entitlement will remain the same.

If your total annual income is less than $45,400 (the lower income threshold for 2024/45), the Government will contribute up to 50 cents for every $1 you put into your super as an after-tax contribution, to a maximum of $500 in a financial year.

If your total income is between the lower and higher income thresholds, your maximum entitlement will reduce progressively as your income rises.

You don't need to apply for the super co-contribution. When you lodge your tax return, if the ATO determines you are eligible, it will automatically be paid into your super account.

For further information, refer to our info sheet on super support for low and middle-income earners or the ATO website.

For local government employees only – removal of mandated employer contributions

From 1 July 2024, local government employees are no longer mandated to make additional contributions on top of their employer’s Superannuation Guarantee contribution. Additional contributions are generally 5% or 6% of an employee’s salary.

The current arrangement for additional contributions will remain for all local government employees. However, from 1 July 2024, employees can opt out of the arrangement. Employees can choose to decrease their additional contribution to zero or another amount, and their employer will just pay the mandated contribution, which varies for local government from 12% or 14%.

At any time in the future, an employee who has opted out of the additional contribution can change their mind and make additional contributions.

Local government employees planning to opt out of additional contributions should consider the impact this may have on the long-term growth of their super. Additional contributions can be the most tax-effective way to save for your retirement, and missing out on years or decades of compound growth could impact your future retirement lifestyle.

Find out more: Update on local government additional contributions from 1 July 2024

We’re here to help

Brighter Super runs a series of webinars throughout the year. We explain the many ways to grow your super and plan for retirement, helping you to make informed decisions about your financial future.

Our webinars cover a range of topics including investments, super basics, insurance, transitioning to retirement, beneficiaries, and retirement income streams. For further information and registrations visit brightersuper.com.au/webinars.

If you would like to discuss how these changes might affect you, talking to a financial adviser can help. If you already have a financial adviser, they can help you make informed decisions about your super.

Brighter Super’s in-house team of financial advisers is here to help you if you do not have a financial adviser¹. Find out more about financial advice or call us on 1800 444 396 to discuss which type of advice would suit you best.