2018 Federal Budget

Super measures at a glance

Last night Treasurer Scott Morrison delivered the 2018 Federal Budget.

The Federal Government has continued to focus on reducing the budget deficit and expects the budget to be in surplus ($2.2 billion) in 2019/20. Big spending measures include infrastructure, technology, hospitals, and aged care.

But what about super? This year there are six key Budget measures that provide opportunities for your super that you need to know about:

  1. Personal income tax cuts
  2. ‘Protecting your super’ package
  3. Work test exemption
  4. Improving the integrity of personal super contributions
  5. The ability for high income employees to opt out of some super guarantee contributions
  6. Social security measures for older Australians

Let’s look at these measures in a little more depth and how they may affect our members.

It’s important to understand that these are Budget proposals and still need to be legislated before they can be implemented. We’ll keep you posted closer to the time about what this could mean for you in more detail.

Super measures at a glance

Last night Treasurer Scott Morrison delivered the 2018 Federal Budget.

The Federal Government has continued to focus on reducing the budget deficit and expects the budget to be in surplus ($2.2 billion) in 2019/20. Big spending measures include infrastructure, technology, hospitals, and aged care.

But what about super? This year there are six key Budget measures that provide opportunities for your super that you need to know about:

  1. Personal income tax cuts
  2. ‘Protecting your super’ package
  3. Work test exemption
  4. Improving the integrity of personal super contributions
  5. The ability for high income employees to opt out of some super guarantee contributions
  6. Social security measures for older Australians

Let’s look at these measures in a little more depth and how they may affect our members.

It’s important to understand that these are Budget proposals and still need to be legislated before they can be implemented. We’ll keep you posted closer to the time about what this could mean for you in more detail.

1. Personal income tax cuts

The Federal Government has announced staged tax relief for middle and low income earners and projects that around 94% of all taxpayers will have a maximum marginal tax threshold of 32.5% or less in 2024/25.

The proposed tax cuts will mean a higher take-home pay for income earners, leaving more money available to be invested in your super account.

Read the 2018 Budget fact sheet on personal tax cuts.

Fact sheet

2. ‘Protecting your super’ package

The Federal Government has announced measures aimed at protecting people’s super:

  • Super fees to be capped at 3% pa for small accounts – This Budget measure applies from 1 July 2019 for small accounts with balances under $6,000.
  • If you’re a VicSuper member that falls into this category, we’ll let you know closer to the time.

  • Exit fees banned – Exit fees will be banned for all super accounts from 1 July 2019.
  • VicSuper doesn’t charge exit fees so this won’t impact our members.

  • Insurance through super ‘opt-in’ rule for younger and low balance members – Insurance will move from a default to an opt-in basis for members with balances of less than $6,000, members under 25 years of age, and members whose accounts have not received a contribution in 13 months.
  • If you’re a VicSuper member that falls into this category, we’ll let you know closer to the time.

  • Changes to inactive/low balance accounts – Members’ accounts must be paid to the Australian Taxation Office where the account balance is less than $6,000 and has not received a contribution for more than 13 months.
  • If you’re a VicSuper member that falls into this category, we’ll let you know closer to the time.

3. Work test exemption

The Federal Government will introduce an exemption from the work test for voluntary super contributions by individuals aged 65-74 with super balances below $300,000 in the first year they do not meet the work test requirements.

If you fall into this category in our VicSuper FutureSaver product, this could provide an opportunity for you to contribute to your super and take advantage of the tax concessions available.

Read the 2018 Budget fact sheet on the work test exemption.

Fact sheet

4. Personal super contributions – improving notice of intention to deduct

The Federal Government has announced measures aimed at improving the integrity of the Notice of Intent (NOI) processes to claim deductions for personal super contributions. This will now be a bigger focus for the ATO as more people are eligible to claim a tax deduction than in prior years.

This measure may affect some VicSuper FutureSaver members who are planning to claim a tax deduction for personal superannuation contributions. It is important that you are aware of the NOI requirements — refer to our member guide > how super works (PDF).

5. The ability for high income employees to opt out of some super guarantee contributions

If your income exceeds $263,157 and have multiple employers, the Federal Government will allow you to nominate wages from some of your employers to be exempt from the superannuation guarantee (SG) from 1 July 2018. This is to ensure you don’t breach your concessional contribution cap.

This measure may affect some VicSuper FutureSaver members.

6. Social security measures for older Australians

The Federal Government has announced it will amend the pension means test rules to encourage the development and take-up of lifetime retirement income products.

If you’re nearing retirement we’ll keep you posted on what this could mean for you.

Get advice on your super usually at no cost through our in-house financial advisers, awarded Best Advice Offer by Conexus Financial. You can talk to our team about your options by calling us on 1300 366 216 or book a chat. There is usually no extra charge for members.

As a profit-to-member fund we’re always looking for ways to generate value for our members. Discover more about the value you get as a VicSuper member.
Get advice on your super usually at no cost through our in-house financial advisers, awarded Best Advice Offer by Conexus Financial. You can talk to our team about your options by calling us on 1300 366 216 or book a chat. There is usually no extra charge for members.

As a profit-to-member fund we’re always looking for ways to generate value for our members. Discover more about the value you get as a VicSuper member.