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The Government has announced several superannuation measures in the 2024-25 Federal Budget, including clarifications, reiterations of previous initiatives, and new proposals. We’ve put together a simplified version of the announcements below:
Starting July 1, 2025, an additional 15% tax will apply to superannuation balances exceeding $3 million. This measure, initially announced in February 2023, has been confirmed.
From July 1, 2025, the government will pay superannuation on government-funded Paid Parental Leave (PPL) for parents of babies born or adopted on or after this date. Eligible parents will receive an additional payment based on the Superannuation Guarantee rate (12% of their PPL payments) as a superannuation contribution annually from July 1, 2026. This aims to benefit around 180,000 Australian families and reduce the impact on retirement incomes for eligible parents.
Starting July 1, 2024, the Fair Entitlements Guarantee Recovery Program will be updated to better assist in recovering unpaid superannuation entitlements from employers in liquidation or bankruptcy.
The government will maintain the current social security deeming rates for another year, until June 30, 2025, to alleviate cost-of-living pressures for Australians receiving the age pension or other income payments. The lower deeming rate will remain at 0.25% and the upper rate at 2.25%. For single age pensioners, this extension means they could be about $3,300 better off compared to if the rates had increased, allowing them to earn more from financial investments without affecting their pension payments.
Starting July 1, 2024, the ATO will receive $187 million over four years to boost its efforts in detecting, preventing, and addressing fraud within the tax and superannuation systems. This funding will help establish a new compliance taskforce to recover lost revenue and stop fraudulent refund attempts. Additionally, the ATO will extend the notification period for retaining Business Activity Statement (BAS) refunds from 14 days to 30 days if fraud is suspected, potentially causing delays for business owners claiming GST refunds on their BAS.
The 2024-25 Federal Budget provides additional funding to the SuperStream Gateway Network Governance Body (GNGB) to improve how superannuation contribution data is handled between employers and super funds. This funding will improve security and accuracy, ensuring the proper handling of data and better protection of sensitive information.
For business owners, this means improved security and accuracy when transmitting superannuation contribution data to super funds as well as ensuring that the data you send is handled properly. The announcement of the additional funding also provides better protection to individuals of sensitive information, aligning with the federal government’s resolve to safeguard the Australian superannuation system.
From July 1, 2026, employers will be required to pay the Superannuation Guarantee at the same time as salary and wages, rather than quarterly. The Superannuation Guarantee rate will also increase from 11% to 11.5% on July 1, 2024, and to 12% on July 1, 2025. When the 12% rate takes effect, it will also apply to government-funded Paid Parental Leave.
From July 1, 2024, the concessional (before-tax) contributions cap will increase from $27,500 to $30,000, and the non-concessional (after-tax) contributions cap will increase from $110,000 to $120,000. The maximum non-concessional contributions cap under the bring-forward rule will increase from $330,000 to $360,000 for individuals with total super balances below $1.66 million. The general transfer balance cap, which limits the amount that can be transferred into retirement phase accounts, will remain at $1.9 million for 2024-25.
The 2024-25 Federal Budget introduces significant changes to superannuation, affecting both individuals and businesses. From increased taxes on large super balances and new rules for Paid Parental Leave to enhancements in fraud detection and improved data governance, these measures aim to safeguard and enhance the Australian superannuation system. Staying informed about these changes and understanding their implications will help you make better financial decisions and ensure compliance with the new regulations.
If you have any questions regarding the information outlined above, please don't hesiatte to get in touch with our friendly team using the form below.
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