Superannuation is back in the news again! However, quite a few of the planned changes to super are still to be legislated.
More than $3m in super
This proposal is in draft at the moment. If legislated, a new tax of 15% will be introduced. The new tax will apply only to the earnings made on the portion of a member’s super balance above $3 million. For example, if a member has $3,200,000 in super, the tax would only be levied on the earnings made on the $200,000 that are above the $3 million. It’s proposed that the tax will be applied to the individual and that the tax can be paid from a person’s personal assets or from an amount released from super. There is a definition of how ‘earnings’ are defined under this new proposed legislation.
Increase to Concessional and Non-Concessional Caps
From 1 July 2024, the annual Concessional Cap on the amount you can contribute to super will increase from $27,500 to $30,000 and the annual Non-Concessional Cap will increase from $110,000 to $120,000. These increases to the caps will also mean that the amounts you can use under the ‘bring forward’ rule and ‘carry forward’ rule will increase if you use these caps after 1 July 2024 (and haven’t already accessed them before this date).
Digital ID
Again, this proposal is not yet in legislation. Once implemented, these Bills will broaden the Digital ID system that service providers can use to verify someone’s identity online.
Objective of super
This draft legislation is currently with the Senate Economics Legislation Committee for review and inquiry. The legislation aims to enshrine the objective of super into law: ‘to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way’.
Paid Parental Leave
This legislation has been introduced to the Senate, but is not yet law. The legislation extends the Paid Parental Leave Scheme to reach 26 weeks by 1 July 2026. However, the recent announcement that superannuation will be paid on Paid Parental Leave has not yet been introduced to Parliament.
Super Performance Test
The Government is seeking submissions from stakeholders regarding the annual super performance test. The discussion surrounds the design of the test, the framework, alternative measures that could be used (including the assessment of fees) and consequences to funds which fail the test.
ElectricSuper is not APRA-regulated so is not assessed as part of the test.
Member Outcomes
While ElectricSuper is not obliged to prepare a Member Outcomes Report each year, we do prepare one in order to comply with the legislation in spirit. APRA is currently reviewing updates to SPS515, which forms a basis for the information in a fund’s Member Outcomes Report. The updates aim to drive better member outcomes in areas such as expenditure and management of financial resources. The proposed reforms would be effective from 1 January 2025, if approved.
Menopause and Perimenopause
The Senate Community Affairs Reference Committee is looking into issues relating the economic impacts of menopause and perimenopause, including reduced workforce participation and retirement planning.