Federal Budget 2023-24
ESSSuper - 10 May 2023
This briefing provides a summary of information regarding superannuation and other changes from the 2023-24 Federal Budget.
Note that these proposed budget changes must pass through Parliament to be legislated, and ESSSuper is currently assessing the potential impact of these changes on our members and our systems.
On 9 May 2023, the Federal Government handed down the Federal Budget 2023-24, with a focus on providing responsible and targeted cost-of-living relief for those who need it most.
There were no significant changes to superannuation. The superannuation industry anticipated that the Government would announce a proposal mandating that superannuation be paid during periods of parental leave. We hope that this measure is prioritised in the future.
Superannuation measures
From 1 July 2026, employer superannuation guarantee (SG) contributions are to be paid on each payday
SG contributions from employers were previously only mandated to be paid quarterly.
The Government has proposed that SG be paid on the same day the employees are paid i.e. if an individual is paid fortnightly, so will their super.
From 1 July 2025, reduced tax concessions for super balances above $3 million
Currently, investment earnings on all superannuation products in the accumulation phase are taxed at the concessional rate of 15%.
The Government has proposed changing this tax treatment for individuals with a total superannuation balance above $3 million. Specifically, the investment earnings tax rate applied to earnings on balances above $3 million will attract an additional 15% tax rate.
Defined benefit interests will be appropriately valued and will have earnings taxed under this measure in a similar way to other interests to ensure commensurate treatment. ESSSuper is working with other Exempt Public Sector Super Schemes and Commonwealth Treasury to establish an appropriate valuation methodology.
Increasing the visibility of unpaid super for the Australian Taxation Office (ATO)
The Government is investing $27 million in 2023-24 for the ATO to improve data capabilities, including matching both employers and super fund data at scale.
The ATO will also receive $13.2 million to consult and co-design with stakeholders a new ATO compliance system which will proactively identify instances of under or unpaid super in near-real time.
Unpaid super recovery measures for the ATO
The Government will implement enhanced unpaid superannuation recovery targets for the ATO.
From 2023-24, the ATO will be assessed on its performance on the payments made to employees as a proportion of super raised, and the amount of super raised and distributed within 12 months.
Other measures
The Federal Budget 2023-24 includes a range of additional measures which, while they do not directly impact superannuation, will have an impact on an individual's income and/or financial position in retirement.
Extend government payments to sole parents by six years
Sole parents will be eligible to receive the single parenting payment until their youngest child turns 14. Previously, the single parenting payment ceased when their youngest child turned eight.
Eligible single parents with one child will be able to earn an extra $569.10 per fortnight, plus an extra $24.60 per additional child.
Expansion of the Home Guarantee Scheme
Under the Home Guarantee Scheme, individuals can purchase a home with as little as a 5% deposit, with the government to assure the remaining 15%.
The Government is proposing to expand the eligibility requirements – to permit family and friends to buy a house together under the Home Guarantee Scheme.
JobSeeker increase for older individuals
The Government is expanding eligibility for the existing higher rate of JobSeeker from age 60 to age 55. Approximately 52,000 eligible recipients will see their base rate increase by over $90.
Increase to income support payments
The Government is increasing the base rate of income support payments (e.g. Austudy, Youth Allowance) by $40 per fortnight to eligible individuals.
Targeted energy bill assistance
Funding for direct energy bill discounts to be matched by states and territories for vulnerable households that receive income support payments such as the pension.
Pensioners, people on other income support payments and small businesses will have their energy bills subsidised by up to $500.
Enabling older individuals to remain at home
To support older Australians who wish to remain at home for longer, the Government is investing $166.8 million to provide an additional 9,500 home care packages.
Expanding Digital ID
Digital ID is a secure, voluntary and convenient way to verify a person's identity online. The Government is investing $26.9 million in 2023-24 to expand Digital ID – helping to increase efficiency and consumer protection, reduce fraud, and make it easier for people to access services online.
We're here to help
We're committed to empowering you to make informed decisions about your super.
On 6 and 8 June, we'll be running webinars designed to help you find out how the proposed Federal Budget 2023-24 changes and other recent legislation could affect your super – from the comfort of your home. Reserve your place now on our Education events web page.
We encourage you to speak to our experienced consultants for information and general advice about your super. To learn more or book a virtual appointment, please submit an online enquiry.