Between the Federal Budget and the rapidly-approaching new financial year, this time of year always signals things to talk about when it comes to super.
While this year’s Budget, delivered on 9 May 2023, was relatively light on changes to super, there were a couple of proposed measures to take note of. There are also a number of previously-announced changes taking effect on 1 July 2023.
Here’s your handy guide to what you need to know:
Payment of super on payday
Currently, employers are obligated to pay Superannuation Guarantee contributions for their staff once a quarter. The Government has proposed that, from 1 July 2026, employers will be required to pay contributions on the same day that they pay salary and wages.
This measure aims to help stop workers missing out on unpaid super, with some estimates finding that 2.9 million employees missed out on $5 billion in employer super contributions in 2018-19.
Receiving contributions more often, instead of once a quarter, could also help employees make the most of their super – the longer each dollar sits in your super account, the more time compound interest has to work.
What else is changing on 1 July 2023
The minimum drawdown for pensions is set to revert back to pre-Covid amounts
The Superannuation Guarantee percentage is increasing again
The Superannuation Guarantee (SG) will increase by 0.5 percent for the third 1 July in a row to hit 11 percent on 1 July 2023.
The SG – the money that your employer must contribute to your super on your behalf – will continue to increase by 0.5 percent each 1 July until it reaches 12 percent on 1 July 2025.
The increase is designed to ensure that our super balances keep up with the cost of living by the time current employees reach retirement, so they can enjoy a comfortable retirement.
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