The Federal 2023-24 Federal Budget has 3 announcements specifically in relation to superannuation, these are:
- Better targeted tax concessions
- Payment of super on payday
- Changes to Non Arm’s Length Income (NALI) provisions
The first 2 measures are included in a Better Targeted Superannuation Concessions and Securing Australians’ Superannuation Package. The NALI announcement is in response to extensive consultation with the superannuation industry.
The Government’s main focus was on measures that address cost of living challenges in light of ongoing geopolitical and market uncertainty. For a full breakdown on the budget, visit www.budget.gov.au.
For super members/retirees
Reduced tax concessions for individuals with more than $3 million in super
Individuals with balances over this threshold will be subject to an additional tax of 15% on the earnings on any balance that exceeds the $3 million threshold. Individuals with total superannuation balances (TSBs) over $3 million at the end of a financial year will be subject to an additional tax of 15% on earnings. This tax is in addition to any tax their superannuation funds pay on earnings in accumulation.
Defined benefit – Interests in defined benefit schemes will be appropriately valued and will have earnings taxed under this measure in a similar way to other interests. This will ensure commensurate treatment.
Proposed start date: 1 July 2025
Payment of super on payday/unpaid super
The Government will introduce legislation that means employers will be required to pay super on payday from 1 July 2026. Currently employers are required to pay the Super Guarantee on at least a quarterly basis. This timing will be changed so employers will be required to pay superannuation on the same day as payday.
Changes to the design of the SG charge will also be necessary to align with increased payment frequency. The Government will consult with relevant stakeholders on the design of these changes, with the final design to be considered as part of the 2024–25 Budget.
The ATO will receive additional resourcing to help it detect unpaid super payments earlier and the Government will set enhanced targets for the ATO for the recovery of payments.
These changes will improve retirement outcomes for around 8.9 million employees, including for young and low-income workers who are most likely to have unpaid super.
The 1 July 2026 start date will provide employers, superannuation funds, payroll providers and other parts of the superannuation system with sufficient time to prepare for the change.
Proposed Start date: 1 July 2026
Seniors – hours worked before impacts Govt pension
Extension of the once-off credit of $4,000 to the Work Bonus income bank measure for age and veterans pensioners as well as temporarily increasing the maximum income bank until 31 December 2023.
Under this measure, pensioners can earn up to $11,800 before their pension is reduced, supporting pensioners who want to work, or work more hours, to do so without losing their pension.
Extended to 31 December 2023
Increased funding for ATO compliance for under payment of super
The Government will provide $40.2 million to the ATO in 2023–24. This includes:
- $27 million for the ATO to improve data matching capabilities to identify and act on cases of SG underpayment by employers and $13.2 million for consultation and co-design.
The Government will also set public targets for the ATO on recovering unpaid superannuation. The ATO will report annually against new measures set out in the Treasury Portfolio Budget Statement.
Tax integrity – improving engagement with taxpayers to ensure timely payment of tax and superannuation liabilities
ATO will receive additional funding over 4 years from 1 July 2023 to enable them engage more effectively with businesses to address the growth of tax and superannuation liabilities.
The additional funding will facilitate ATO engagement with:
- taxpayers who have high-value debts over $100,000 and
- aged debts older than 2 years where those taxpayers are either:
- public and multinational groups with an aggregated turnover of greater than $10 million, or
- privately owned groups or individuals controlling over $5 million of net wealth.
The Government estimates that these measures will result in $12.3 million in the payment of outstanding unpaid superannuation.
For super funds
Changes to Non-Arms Length Income (NALI) Provisions
Amend the non-arm’s length income (NALI) provisions which apply to expenditure incurred by superannuation funds by:
- limiting income of self-managed superannuation funds and small Australian Prudential Regulation Authority (APRA) regulated funds that are taxable as NALI to twice the level of a general expense. Additionally, fund income taxable as NALI will exclude contributions
- exempting large APRA regulated funds from the NALI provisions for both general and specific expenses of the fund
- exempting expenditure that occurred prior to the 2018-19 income year
Beneficial ownership register
- $1.9 million over 2 years from 2023–24 to establish a public registry of beneficial ownership of companies and other legal vehicles, including trusts.
Non-super related announcements
Disrupt investment scam websites
Australian Securities and Investments Commission’s work will be boosted to disrupt investment scam websites.
Electricity bill relief
The Government is partnering with state and territory governments to deliver up to $3 billion of electricity bill relief for eligible households and small businesses.
This plan will deliver up to $500 in electricity bill relief for eligible households and up to $650 for eligible small businesses.
Proposed start date: July 2023
- Increasing the maximum rates of Commonwealth Rent Assistance by 15%.
- Around 1.1 million households receiving Commonwealth Rent Assistance will receive this increase.
- More than 310,000 of these are receiving the Age Pension
Proposed start date: September 2023
Expansion of Digital ID
Digital ID is a secure, voluntary and convenient way to verify a person’s identity online, while minimising collection of personal information. The Government is investing $26.9 million in 2023-24 to expand Digital ID – helping to increase efficiency and consumer protection, reduce fraud, and make it easier for people to access services online.
Increase the rate of eligible working age and student payments, including:
- Austudy and
- Youth Allowance.
In September, around 1.1 million Australians will receive a $40 per fortnight increase to their basic payment rate.
Extending eligibility for existing higher JobSeeker basic rate for those aged 55 and above.
- In September, eligibility for the higher rate of payment will be extended to single Australians aged 55 to 59 who have been on the payment for 9 or more continuous months.
- This will benefit around 52,000 recipients, 55% of whom are women.
- Acknowledges the additional barriers these recipients have to re-entering the workforce, including age discrimination or poor health.
- JobSeeker recipients aged 60 years and older will also benefit from the $40 increase per fortnight to their basic payment rate.
Proposed start date: September 2023
SMS Sender ID Registry and National Anti-Scam Centre
Fund the Australian Communications and Media Authority (ACMA) to establish an SMS Sender ID Registry to help prevent scammers from spoofing key industry or government brand names.
ACMA will receive $10.5 million to establish an SMS Sender ID Registry for brands to record their primary and associated names used in text message headers. The initiative will help telecommunications companies prevent scammers from spoofing industry or government brand names – such as Linkt or myGov – in text message headers to deceive Australian consumers.
National Anti-Scam Centre to be established in the Australian Competition and Consumer Commission (ACCC), which will deliver an innovative, world-leading public-private sector partnership to disrupt illegal scams
Sovereign green bonds
The Australian Office of Financial Management will be issuing green bonds from 2024. Australian Government green bonds will be fixed income bonds that provide financing for specific government programs with positive climate change and environmental outcomes. Green bonds provide investors the opportunity to support public projects that contribute to climate change and environmental objectives. Green bonds will not impact the total stock of Government debt as they displace issuance of normal bonds.
Australian sustainable finance taxonomy/ corporate climate disclosure requirements
- Co-funding a development phase of an “Australian Sustainable Finance Taxonomy” – a project to help investors more easily target their funds towards particular kinds of sustainability projects
- Implementing corporate climate disclosure requirements
Bolster ASIC’s enforcement action against greenwashing by providing $4.3 million in funding for ASIC to expand “surveillance and enforcement functions” on businesses making green claims.
Establishing a Net Zero Authority
Establishment of a national Net Zero Authority, with responsibility for promoting the orderly and positive economic transformation associated with achieving net zero emissions. The Authority will work across all levels of government and with workers, companies, investors, and communities to facilitate economic development and diversification and help smooth the changes as Australia moves to a clean energy economy.
The $10 billion Housing Australia Future Fund, will support the delivery of 30,000 social and affordable homes in its first 5 years