2019 Federal Budget - Super measures at a glance
Treasurer Josh Frydenberg delivered the 2019 Federal Budget.
The Government has forecast a $7.1 billion budget surplus for the 2019-20 financial year, with up to $45 billion of surpluses over the next four years. Key measures include: $302 billion worth of tax cuts, including $158 billion worth of income tax cuts for low and middle income earners; $100 billion in infrastructure spending; and more funding for job training and skills, education, health, aged care, carers, the disabled, and the environment.
But what about super? This year’s Budget is lighter on super measures than last year’s, but importantly, seeks to streamline super contributions for older Australians and help more people contribute more into their super account through:
- Personal income tax cuts;
- Relaxation of rules for older people making super contributions.
Let’s look at these measures in a little more depth and how they may affect our members.
Note: These are Budget proposals only and still need to be legislated before they can be implemented.
Personal income tax cuts
The government has announced a tax cut for middle and low income earners from FY2018-19 of up to $1,080 for taxpayers earning up to $126,000 per year. The government will also lower the 32.5% tax rate to 30% from 1 July 2024, which will cover all taxpayers earning between $45,000 and $200,000.
The proposed tax cuts will mean a higher take-home pay for most income earners, leaving more money available to be invested in your super account.
Relaxation of rules for older people making super contributions
The Federal Government will streamline the rules for older Australians to make voluntary contributions:
1) From 1 July 2020, people aged 65 and 66 will be able to make voluntary super contributions (concessional and non-concessional) without having to meet the work test rule (which requires an individual to work at least 40 hours over 30 consecutive days).
Relaxing the work test rule for older Australians will help provide more flexibility to save for retirement.
2) From 1 July 2020, people aged 65 and 66 will (subject to their total superannuation balance) be able to make up to three years of non-concessional contributions in a single financial year under the ‘bring-forward’ rule.
It will be easier for older people to contribute more into their super fund in a single financial year.
3) From 1 July 2020, people will be able to receive spouse contributions up to and including age 74, up from the current cut-off of 69 years, with those aged 65 and 66 no longer needing to meet a work test.
This new measure increases the flexibility to receive spouse contributions.
Find out more
To understand more about these proposed changes or to get some advice on your super, talk to our team by calling us on 1300 366 216 or book an appointment online There is usually no additional cost to members.
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