Federal Budget 2022-23 reveal

The 2022-23 Federal Budget announced by the Federal Treasurer, Dr Jim Chalmers on Tuesday 25 October, revealed there were no major announcements about superannuation but offered assistance for ‘downsizers’, pensioners and parents. 

Superannuation and real estate to come together 

Housing Accord

The Government announced that it will provide $350 million over 5 years from 2024 / 2025 to support funding of an additional 10,000 affordable homes under a Housing Accord with state and territory governments and other key stakeholders. 

The Accord will seek to facilitate superannuation and institutional capital investment in social and affordable housing, alongside established state and territory programs. The Commonwealth support will include availability payments over the longer term, to incentivise institutional investment through covering the gap between market rents and subsidised rents. 

For super members/retirees

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. The measure will have effect from the start of the first quarter after Royal Assent of the enabling legislation.

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. 

This measure provides greater flexibility to contribute to superannuation and aims to encourage older Australians to downsize sooner to a home that better suits their needs, thereby increasing the availability of suitable housing for Australian families.

Incentivising Pensioners to Downsize

The Australian Government is extending the exemption of home sale proceeds from pension asset testing from 12 months to 24 months, and changing the income test, to apply only the lower deeming rate (0.25 per cent) to principal home sale proceeds when calculating deemed income for 24 months after the sale of the principal home. 

This will give pensioners more time to purchase, build or renovate a new home before their pension is affected.

Incentivise pensioners into the workforce

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.

Subject to age-based work tests, this measure will see more pensioners earning mandatory super, particularly since the $450 earnings threshold was removed.

Lifting the Income Threshold for the Commonwealth Seniors Health Card

The Government will provide $69.6 million over 4 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.

The Government will also freeze social security deeming rates at their current levels for a further two years until 30 June 2024, to support older Australians who rely on income from deemed financial investments, as well as the pension, to deal with the rising cost of living.

Paid Parental Leave Scheme

The Government will introduce reforms from 1 July 2023 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. 

From 1 July 2024, the Government will start expanding the scheme by two additional weeks a year until it reaches a full 26 weeks from 1 July 2026. 

Both parents will be able to share the leave entitlement, with a proportion maintained on a “use it or lose it” basis, to encourage and facilitate both parents to access the scheme and to share the caring responsibilities more equally. Sole parents will be able to access the full 26 weeks.

Superannuation continues to be absent from the scheme.

For employers 

Investing in the energy efficiency of small and medium-sized businesses 

The Government is responding to rising energy costs by committing $62.6 million to support small and medium-sized businesses in improving their energy efficiency and reducing energy use. 

Workplace relations support for small businesses 

The Government will work with small business, unions, workers and industry to deliver a simpler, more accessible and fairer workplace relations system. This includes removing complexity to help small businesses reach agreements with their employees, providing bargaining support for small businesses and assisting small businesses to implement new family and domestic violence leave entitlements for their employees. 

Supporting small business well-being

The Government is providing $15.1 million to extend the tailored small business mental health and financial counselling programs, NewAccess for Small Business Owners and the Small Business Debt Helpline. 

Australian Tax Office

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

For a full breakdown on the budget, visit www.budget.gov.au

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