On Tuesday 9 May 2023, the Treasurer, Dr Jim Chalmers delivered the Albanese Government’s second budget which he said focused on achieving the right balance between fiscal discipline and providing targeted assistance to Australian households battling rising cost of living pressures.
Superannuation
Super Guarantee contributions to be paid with wages
The Government announced that from 1 July 2026, employers will be required to pay compulsory SG contributions for employees on the same day that their wages / salary is paid.
The Government says this measure is designed to improve retirement outcomes for Australians by ensuring they receive their contributions sooner and providing greater visibility of SG entitlements.
End of reduced minimum pension drawdown rates
The Government has not further extended the temporary reduction in minimum pension drawdown rates. The minimum rates were originally reduced in the 2020 Budget to allow retirees greater flexibility in managing their affairs in light of the pandemic. Anyone who has been taking advantage of the lower drawdown rates may need to review their investment strategies to ensure there is sufficient cash flow or liquid assets to facilitate higher drawdown levels.
Increased tax on super balances over $3 million
From 1 July 2025, the tax rate on earnings for individuals with a total superannuation balance over $3 million will be increased to 30% (currently 15%).
The higher tax rate will only apply to earnings on the portion of the individual’s total superannuation balance that exceeds $3 million. The Government expects this measure will impact around 80,000 individuals in 2025-26.
Other Announcements
Eligibility for Home Guarantee Scheme expanded
The Government announced that the eligibility criteria for the Home Guarantee Scheme would be expanded as follows:
- Allow joint applications from two people who may not be spouses or de facto partners.
- Allow access to non-first home buyers who have not owned a property in Australia for at least 10 years.
- Allow permanent residents to access the scheme.
- Allow single legal guardians of children to access the Family Home Guarantee Scheme.
The Home Guarantee Scheme includes the following initiatives:
- First Home Guarantee – helps eligible first home buyers to buy their first home with a deposit of as little as 5%.
- Family Home Guarantee – supports eligible single parents with at least 1 dependent child to buy a home with a deposit of as little as 2%.
- Energy Price Relief Plan – Targeted direct energy bill relief for eligible households and small businesses including: pensioners, Seniors Health Card holders, Family Tax Benefit A and B recipients and small business customers of electricity retailers.
- Increase to Working Age Payments – The Government will increase the base rate of various working age payments by $40 per fortnight from 20 September 2023 including: JobSeeker, Youth Allowance, Parenting Payment (Partnered), Austudy and Disability Support Pension (Youth). In addition, eligibility for the higher single JobSeeker payment rate will be reduced from age 60 to age 55.
- Parenting Payment (Single) eligibility expanded – Currently, single parents lose access to the Parenting Payment once their youngest child turns 8 years old. This age will be increased so that single parents remain eligible for the payment until their youngest child turns 14 years of age.
Cost of living relief
The Government announced a variety of targeted measures that are aimed to assist eligible Australians with increased cost of living pressures including:
