Superannuation Budget Highlights 2023

Acknowledging our financial and economic challenges, this budget focuses on the cost of living relief and re-targeting spending.

Following is a summary of the key points for members and business partners.

Key super measures

  • National Housing Accord

Under this policy, the government will look to bring together key stakeholders, including superannuation funds to collaborate on real and lasting solutions into affordable housing.

  • Expanding eligibility for downsizer contributions

The government will allow more people to make downsizer contributions to their superannuation by reducing the minimum eligibility age from 60 to 55 years of age. This measure is currently before Parliament, and if passed, will take effect from the start of the first quarter after receiving Royal Assent.

The downsizer contribution, allows people to make a one-off post-tax contribution to their superannuation of up to $300,000 per person from the proceeds of selling their home. Both members of a couple can contribute and contributions do not count towards non-concessional contribution caps.

Other measures

  • Incentivising pensioners to downsize

To give pensioners more time to purchase, build or renovate a new home before their pension is impacted, the government is extending the exemption of home sale proceeds from pension asset testing from 12 months to 24 months. Changes will also be made to the income test, to apply only the lower deeming rate (0.25%) to principal home sale proceeds when calculating deemed income for 24 months after the sale of the principal home.

  • Support for pensioner income

To support pensioner income, the government will provide $61.9 million over two years from 2022–23 to provide age and veterans pensioners a once off credit of $4,000 to their Work Bonus income bank.

The temporary income bank top up will increase the amount pensioners can earn in 2022–23 from $7,800 to $11,800, before their pension is reduced, supporting pensioners who want to work or work more hours to do so without losing their pension.

  • Lifting the Income Threshold for the Commonwealth Seniors Health Card

The government will provide $69.6 million over four years from 2022–23 to increase the income threshold for the Commonwealth Seniors Health Card from $61,284 to $90,000 for singles and from $98,054 to $144,000 (combined) for couples.

  • Support for residential aged care facilities

A broad range of measures were announced in support of older Australians. These include:

      • $2.5 billion in funding over 4 years for aged care facilities to have a registered nurse onsite 24 hours a day, seven days a week.
      • A commitment of $23.1 million to support the implementation of the Support at Home Program from July 2024. This is aimed at delivering more choice for older Australians in their home.
      • Investment in addressing the aged care workforce shortage through the expansion of migration programs
  • Measures to deliver cheaper medicine

To help reduce current cost of living pressures, the government announced $1.4 billion in additional funding for Pharmaceutical Benefits Scheme (PBS) listed new medicines over four years and an additional $787.1 million in spending on PBS to reduce the cost of some medicines from 1 January 2023.

  • Paid Parental Leave Scheme

From 1 July 2023, reforms will be introduced to make the Paid Parental Leave Scheme flexible for families so that either parent is able to claim the payment and both birth parents and non-birth parents are allowed to receive the payment if they meet the eligibility criteria.

Parents will also be able to claim weeks of the payment concurrently so they can take leave at the same time. Greater flexibility will encourage better balance between paid work and caring responsibilities.

  • Cheaper Child Care

A range of measures will be introduced to help make childcare more affordable, making it easier for parents and carers to participate in paid work.

The measures include lifting the maximum Child Care Subsidy rates for families earning less than $530,000 with children in care, and introducing a base entitlement to 36 hours per fortnight of subsidised early childhood education and care for families with First Nations children, regardless of activity hours or income level.

Key business measures

  • Support for energy efficiency

The Budget includes $62.6 million over the next three years to support small to medium enterprises to adopt energy efficient equipment upgrades.

  • Small Business Debt Helpline

$15.1 million in funding was announced to extend the small business mental health and financial counselling programs, New Access for Small Business Owners and the Small Business Debt Helpline.

  • Infrastructure and investment programs

The government has reconfirmed its commitment to the $120 billion pipeline of investment in transport infrastructure over the next 10 years. $50.5m is proposed for a new Australian Critical Minerals Research and Development Hub and $15 billion over seven years from 2023 for establishing a National Reconstruction Fund to co-invest in priority industries.

  • Job creation and long-term productivity measures

Funding has been provided from 2022–23 to provide 480,000 fee-free TAFE and community-based vocational education places over four years in industries and regions with skills shortages, starting with 180,000 in 2023. Funding has also been provided for 20,000 additional Commonwealth supported places at universities and other higher education providers commencing in 2023 and 2024.

  • Australian Tax Office measures

To help address tax compliance and the recovery of tax arrears, an additional $200 million per year over the next four years, has been announced for the ATO’s Tax Avoidance Taskforce.

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