Federal Budget 2024/25
May 14, 2024
There were no surprises for super in this year’s Federal Budget, which had a strong focus on providing cost-of-living relief amid persistent inflation and high interest rates.
Key measures included stage three tax cuts, increased rent assistance, energy bill relief, student debt relief, and funding to improve housing affordability.
Regarding superannuation Budget measures, the biggest item – already announced back in March – is that eligible parents will receive super on government-funded Paid Parental Leave (PPL).
Here’s a summary of the measures specific to superannuation and retirement.
It’s important to remember that the Budget measures outlined need to be legislated before they come into effect. For further information, please see the Federal Budget overview at budget.gov.au
New measures
Super on paid parental leave
As outlined above, from 1 July 2025, super will be included on government-funded Paid Parental Leave (PPL) for parents of babies born or adopted on or after 1 July 2025. Payments will be made annually to individual’s super funds from 1 July 2026. This measure, previously welcomed by TelstraSuper, is still a proposal and not yet law. If legislated, it’s expected this measure will help reduce the super gender gap.
Measures to better protect against super fraud
The Government will provide the Australian Taxation Office (ATO) with more than $187 million to better protect taxpayer data and Commonwealth revenue against fraudulent attacks on the tax and superannuation systems. This will ensure the ATO has dedicated resources to manage increasing risk, prevent revenue loss, and support victims of fraud and cybercrime.
Deeming rates frozen
The Government has extended the current freeze on deeming rates for another 12 months to 30 June 2025. The measure will allow retirees to benefit from increases in interest rates and returns without reductions in their age pension. It is estimated that this will benefit 876,000 income support recipients, including 450,000 Age Pensioners. The lower deeming rate will remain at 0.25% and the upper rate will remain at 2.25%.
Other key benefits for retirees
Pensioners and concession card holders will benefit from a freezing of the maximum cost of PBS listed drugs for pensioners and concession card holders at $7.70 for five years, while all retirees will benefit from $300 energy bill relief, and eligible pensioners could also benefit from the increase in commonwealth rent assistance.
Other upcoming changes to super
While not part of this years’ Budget announcements, there are some upcoming changes to super that will come into place on 1 July 2024 and beyond, including:
Superannuation Guarantee (SG) to rise to 11.5%
The Superannuation Guarantee – that’s the minimum amount of super employers must pay eligible employees – will increase to 11.5% from 1 July 2024.
This is in line with the previously legislated timetable to increase the SG to 12% by 1 July 2025.
Increases to contribution caps
Due to indexation, the concessional cap will increase to $30,000 per year (up from $27,500), while the non-concessional cap will increase to $120,000 per year (up from $110,000) from 1 July 2024.
The increase to the non-concessional cap also affects the bring-forward rule over 3 years. The ‘total superannuation balance’ threshold for making non-concessional contributions will remain at $1.9 million for 2024-25.
LEARN MORE ABOUT CURRENT CONTRIBUTION CAPS
Co-contributions
For those wanting to take advantage of the Government’s Co-Contribution scheme, the ‘lower income threshold’ is $45,400 (up from $43,445) for 2024-25; ‘higher income threshold’ is $60,400 (up from $58,445).
Other caps
The Capital Gains Transfer cap amount for non-concessional contributions is $1.780 million for 2024-25 (up from $1.705 million).
There is no change to the General Transfer Balance Cap at $1.9 million or the Total Superannuation Balance threshold at $1.9 million.
The ‘defined benefit income cap’ will remain at $118,750 for 2024-25.
SG threshold for high income earners
The 'maximum contribution base' is $65,070 (up from $62,270) per quarter for 2024-25. If your earnings exceed this amount for the quarter, your employer does not need to pay SG contributions on your earnings above this limit.
Need help with your super?
TelstraSuper members can get simple advice about their TelstraSuper account for investment, contributions and insurance held in TelstraSuper over the phone at no additional cost – it’s part of membership. Comprehensive financial advice is also available through TelstraSuper Financial Planning for a competitive fee.
If you’re not a member, why not consider joining today? TelstraSuper is open to all employers and employees.
