On 9 May 2023, the highly anticipated 2023 Federal Budget was unveiled by the Federal Treasurer, Jim Chalmers. The budget encompassed several notable highlights from a tax and superannuation standpoint. There are many big changes this year, like the end of the Low and Middle Income Tax Offset (LMITO) among others, but in this article we will be focusing on the changes for pensioners and super funds.
Federal budget for pensioners
As part of recent policy changes, the minimum age at which older individuals become eligible for the higher JobSeeker Payment rate has been reduced from 60 to 55 years. This adjustment aims to provide increased financial support to older individuals who may be seeking employment opportunities.
The ongoing workforce participation incentive measures that enable pensioners to work without jeopardising their age pension payments will be extended for an additional six months, all the way until 31 December 2023!
This measure has been thoughtfully crafted to empower pensioners who have a desire to stay engaged in the workforce to do so while safeguarding their essential retirement income. It's a fantastic opportunity for age pensioners to pursue their career aspirations while maintaining their financial security.
The realm of superannuation has gone through some drastic changes from the budget, we'll share below the highlights of the Federal Budget 2023. The budget has unveiled a series of transformative measures aimed at reshaping the landscape of retirement savings and financial security.
High super balanced individuals, be prepared to save. Starting from 1 July 2025, individuals with superannuation balances exceeding a whopping $3 million will experience reduced tax concessions. This change will mainly affect high income earners.
But that's not all! Effective from 1 July 2026, employers will be obliged to pay their employees' superannuation guarantee entitlements simultaneously with their salary and wages, promoting timely and efficient financial management.
Recognising the importance of addressing the mounting superannuation liabilities, the government has taken a proactive approach by allocating additional funding. The Federal Budget has unveiled plans to provide substantial financial resources aimed at tackling the growing burden of superannuation liabilities
And hold on tight, because the non-arm's length income (NALI) provisions are undergoing amendments to grant taxpayers even greater certainty. These updates promise to revolutionise the superannuation landscape, bringing transparency and equitable benefits to all.
The information provided on this tax blog is intended for general informational purposes only and should not be considered as professional tax advice. While we strive to ensure the accuracy and currency of the content, tax laws and regulations are subject to change, and individual circumstances may vary. We recommend consulting a qualified tax professional or seeking advice from the Australian Taxation Office (ATO) for personalized guidance tailored to your specific situation. The authors and creators of this blog disclaim any liability for errors, omissions, or inaccuracies in the information provided. Use the information at your own discretion, and always exercise caution when making financial or tax-related decisions.