On Tuesday 25 October, Treasurer Jim Chalmers delivered his first Federal Budget. The Government focussed on addressing the national deficit and tackling cost-of-living concerns, especially housing affordability.
We’ve summarised some of the superannuation-related changes that could affect Hostplus members and employers.
For members in or approaching retirement
Eligibility for “downsizer” contributions expanded
As announced previously, the Government will allow more people to make downsizer contributions to their superannuation, by reducing the minimum eligibility age from 60 to 55 years of age.
The downsizer contribution allows people to contribute up to $300,000 to their super, from the proceeds of selling their principal residence (home). Both members of a couple can make a one-off, after tax contribution, and contributions don’t count towards your non-concessional contribution cap.
This measure aims to encourage older Australians to downsize sooner, thereby increasing the availability of housing for Australian families.
The Government is also extending the exemption of home sale proceeds from pension asset testing from 12 months to 24 months. So if you receive a Government Age Pension and you sell your home, you now have a longer grace period before your sale proceeds affect your Age Pension.
The Government is also changing the income test, to apply a lower rate (0.25%) to principal home sale proceeds when calculating your deemed income for 24 months after you sell your home.
Work Bonus income bank for pensioners increased
Age Pensioners will be able to earn an additional $4,000 in the 2022-23 financial year before it affects their pension.
The temporary Work Bonus income bank top up means pensioners can now earn up to $11,800 before their Age Pension is reduced. Previously you were able to earn $7,800. This change is designed to support pensioners who want to work more without losing their pension entitlements.
The Government will increase the income threshold for the Commonwealth Seniors Health Card, from $61,284 to $90,000 for singles and from $98,054 to $144,000 (combined) for couples.
The Government will also freeze social security deeming rates at their current levels for a further two years, until 30 June 2024. This measure aims to support older Australians who rely on income from deemed financial investments, as well as the Age Pension, to deal with the rising cost of living.
For members of all ages
Right to superannuation strengthened
To further strengthen the superannuation system, the Government has committed to including a right to superannuation within the National Employment Standards. Such a right would give workers the power to pursue their unpaid superannuation as a workplace entitlement.
While there were no updates specifically around superannuation, the Government did make several announcements affecting employers.
Improving access to the enterprise bargaining process
The Government will revitalise the workplace relations system by simplifying and expanding access to the enterprise bargaining process. These changes intend to help employers and employees reach agreements on better pay and conditions, especially in low-paid occupations.
The Government will establish Jobs and Skills Australia, a statutory body to provide independent advice on workforce skills and training needs. It will aim to address workforce shortages and build long-term capacity in priority sectors by bringing together employers, employees, governments and training providers.
The Government will also develop an Australian Skills Guarantee for apprentices. Under the Guarantee, one in 10 workers on major federally funded projects must be an apprentice, trainee or paid cadet, with specific targets for women.
Ending sexual harassment at work
The Government is implementing the Respect@Work Report to strengthen laws that prevent sexual harassment, including a requirement for employers to actively prevent sexual harassment in Australian workplaces.
For a comprehensive update on the budget and how it may impact you, visit the Federal Government Budget website.
The information in this article is correct at time of publication.