Compared to recent years, the 2022-23 Federal Budget announcement on 29 March proved to be a very quiet night for superannuation, with no new measures and no changes to superannuation taxation, nor the rules around contributions.
Given the amount of superannuation-related change in recent Budgets, and with trustees currently dealing with major initiatives such as the Retirement Income Covenant and APRA’s data transformation project as well as the potential impact of the extension of the performance test to Choice products this year, we expect the lack of new initiatives in superannuation in this year’s Budget will be welcomed by trustees.
As foreshadowed prior to the Budget announcement, the current reduction in the minimum drawdown limits for account-based and similar income streams has been extended for another year.
The minimum drawdown rates have been set at 50% of their normal levels since 1 July 2020 in response to the COVID-19 pandemic, and this reduction will now continue for the 2022-23 financial year.
While there were announcements intended to support first home buyers, there were no changes to the First Home Super Saver Scheme this year, after the maximum amount of contributions that can be withdrawn from the scheme was increased in last year’s Federal Budget. Those increases are now law and will commence from 1 July 2022.
The 2022-23 Women’s Budget Statement included lengthy discussion of the gender pay gap and a number of proposals intended to improve women’s lives. However, there were no measures designed to directly address the gender gap in superannuation.
Changes were announced to the Paid Parental Leave scheme, with Dad and Partner Pay to be rolled into Parental Leave Pay to create a single scheme of up to 20 weeks for eligible working parents. However, there was no move to pay superannuation on government funded parental leave.
Unrelated to superannuation, the Low and Middle Income Tax Offset will be increased by $420 for the 2021-22 year, to be paid when individuals submit their tax returns for that year. There will also be a once-off $250 economic support payment made to eligible recipients of various income support payments, including the Age Pension, and to concession card holders. This payment will be made in April 2022.
