Federal Budget 2019: what it may mean for your super and retirement

3 Apr 2019 By Media Super Team

The Morrison Government announced the 2019-20 Federal Budget on Tuesday 2 April, 2019.

The focus of this year’s Federal Budget was on personal tax cuts for low, middle and high income earners. The Government also announced several changes to superannuation aimed at helping older Australians who can afford to make additional contributions to superannuation.

Compared to previous budgets, the superannuation changes are modest and will have little impact on most Australians. The super changes announced will need to be legislated and, with a Federal election around the corner, there is no certainty they will be implemented.

FOR SUPER MEMBERS

Tax cuts

The tax cut proposals are designed to be implemented over a five-year period with three key start dates:

Immediately: An Increase to the low and middle income tax offset providing up to $1,080 for singles; up to $2,160 for dual income families.

From 2022-23: An increase in the income tax threshold for the 19 per cent tax rate from $41,000 to $44,000 plus an increase in the low income tax offset from $645 to $700.

From 2024-25: A decrease in the 32.5 per cent tax rate to 30 per cent for Australians earning between $45,000 and $200,000.

FOR PENSION MEMBERS

Super changes

There are three changes to superannuation proposed for 1 July 2020, which will benefit older Australians who can afford to make additional voluntary superannuation contributions.

Work test exemption

Australians aged 65 and 66 years will be able to make voluntary contributions (concessional and non-concessional), without meeting the work test.

Bring-forward rule

The ‘bring-forward’ rule, which currently allows those aged under 65 years to make three years’ worth of non-concessional contributions in

one year will be extended to those aged 65 and 66. This will allow these people to make voluntary non-concessional caps of up to $300,000 in a single year.

Spousal contributions

Members up to age 74 will be able to make/receive voluntary spouse contributions. This is an increase from the current cut-off of 69 years.

Pensioner benefits

The Government is proposing a one-off Energy Assistance Payment of $75 for single pensioners and $125 for couples. The payment would be made this financial year at a cost of $284 million.

More information

The full 2019-20 budget is available at www.budget.gov.au.

For further information on your super, simply call our Super Helpline on 1800 640 886 (Monday-Friday, 8am-7pm /AEDT/AEST).

We also have financial advice (phone-based or face-to-face) available for members. Let us know if you would like to book an appointment or find out more.