2022-23 Budget: A wrap up of proposed new super measures
Read about the new budget measures that may impact your superannuation and retirement
With a change of government earlier this year, the Albanese Government handed down an updated 2022-23 Federal Budget on 25 October 2022.
Below we recap on some of the key proposed superannuation and retirement measures that may be relevant to you.
These measures, and the information relating to them, have been sourced from the 2022-23 Federal Budget papers. Please note: These measures are yet to be passed as legislation and may be subject to change.
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 after-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 aims to provide greater flexibility to contribute to super and encourage older Australians to downsize sooner to a home that better suits their needs, and in turn, increasing the availability of suitable housing for Australian families.
Incentivising pensioners to downsize
The Government will provide $73.2 million over four years from 2022–23 (and $0.4 million per year after that), including:
- extending the assets test exemption for principal home sale proceeds from 12 months to 24 months for income support recipients
- changing the income test, to apply only the lower deeming rate (0.25 percent) to principal home sale proceeds when calculating deemed income for 24 months after the sale of the principal home.
This measure will aim to reduce the financial impact on pensioners looking to downsize their homes in an effort to minimise the burden on older Australians and free up housing stock for younger families.
Other policy measures that may be of interest:
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.
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.
Incentivise pensioners into the workforce
(with temporary work bonus expansion)
The Government will provide $61.9 million over two years from 2022–23 to provide age and veteran pensioners a one-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, without losing their pension.
Aged Care – Implementing aged care reform
The Government will provide $2.5 billion over four years from 2022–23 to reform the aged care system. Funding includes, for example:
- $2.5 billion over four years from 2022–23 to improve the quality of care in residential aged care facilities by requiring all facilities to have a registered nurse onsite 24 hours per day, 7 days a week from 1 July 2023 and increasing care minutes to 215 minutes per resident per day from 1 October 2024.
The Government will provide $540.3 million over four years from 2022–23 to improve the delivery of aged care services and respond to the Final Report of the Royal Commission into Aged Care Quality and Safety. Funding includes, for example:
- $38.7 million over four years from 2022–23 to establish the Inspector-General of Aged Care and the Office of the Inspector-General of Aged Care as a Statutory Agency.
- $23.1 million in 2022–23 to support the implementation of the Support at Home Program from July 2024 through the rollout of a large scale trial of an integrated assessment tool, the establishment of a Service List Advisory Body, commissioning the Independent Hospital and Aged Care Pricing Authority to undertake a pricing study, and to consult with the aged care sector.
The Government will also extend existing grant arrangements for the Commonwealth Home Support Programme for a further 12 months to 30 June 2024, to reflect the new start date of 1 July 2024 for the Support at Home Program.
Reduced Co-payment for treatments on the PBS
The Government will provide $787.1 million over four years from 2022–23 (and $233.4 million per year ongoing) to decrease the general patient co-payment for treatments on the Pharmaceutical Benefits Scheme (PBS) from $42.50 to $30.00 on 1 January 2023.
Changes to measures announced in the Liberal Governments March 2022 Budget
The Government has reviewed and decided to not proceed with several legacy tax and superannuation measures that were announced (but not legislated) by the previous Government. Including, but not limited to:
- The 2016–17 MYEFO measure titled: Pension Supplement – changes to the payment of the Pension Supplement for permanent departures overseas and temporary absences
- The 2018–19 Budget measure that proposed changing the annual audit requirement for certain self-managed superannuation funds (SMSFs)
- The 2021–22 Budget measure that proposed relaxing residency requirements for SMSFs, from 1 July 2022 to the income year commencing on or after the date of Royal Assent of the enabling legislation.
These are only some of the budget announcements. Go here To review all the budget announcements.