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Proposed changes

How might your super be changing?

These changes were proposed in the March 2023 Federal Budget.  

Maintaining the increase to the super guarantee

The Federal Budget in May 2023 maintained the Super Guarantee’s legislated increase to 12%. From 1 July 2024, the Super Guarantee will increase to 11.5%. It will continue to increase by 0.5% on 1 July each year until it reaches 12% in 2025. 

Requiring super to be paid with salary and wages to tackle unpaid super

From 1 July 2026, employers will be required to pay their employees’ super at the same time as their salary and wages. This change will help address the $5 billion a year scourge of unpaid super by making it easier for workers to keep track of payments and for the Australian Taxation Office (ATO) to monitor compliance. It will also reduce the risk of businesses building up large super contribution liabilities at the end of each quarter. This move will also lead to higher returns for more than 4 million Australians currently receiving their super quarterly, as super paid more frequently compounds faster.

More funding and resources for the ATO to tackle unpaid super

The Government also announced $40 million in funding for the ATO so it better enforces super compliance, plus it has announced stronger targets for the ATO’s recovery of unpaid super amounts.

Concessional tax rate changes for balances over $3 million

From 1 July 2025, the concessional tax rate applied to future earnings for balances above $3 million will be 30 per cent, instead of 15 per cent. This adjustment will affect around 80,000 people in 2025/26.

Opportunities for ongoing improvement to super 

While the Federal Budget May 2023 contained some new measures, the following initiatives were not contained in the budget: 

The budget did not contain measures to make superannuation payable on the Commonwealth’s Parental Leave Pay scheme to help close the gender super gap. This is disappointing given the opportunity to reinvest savings derived from the $3 million tax concession changes to fund the measure.  Industry Super Australia will continue to advocate for super to be paid on paid parental leave and to increase the Low-Income Superannuation Tax Offset at the earliest opportunity the federal budget allows.

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