Starting 1 July 2024, a range of superannuation changes are set to take effect. Here’s what’s changing and how it may impact your super.
Super Guarantee increase
From 1 July, the minimum amount employers must contribute to employees’ super each year — the Super Guarantee (SG) — will rise from 11% to 11.5%. This means more money going into your super account, giving your retirement savings a welcome boost.
Government’s super co-contribution scheme
Starting 1 July, the government’s super co-contribution scheme is increasing the income thresholds for low to middle income earners. This means if you earn less than $45,400 or up to $60,400 in the 2024-25 financial year, and make an after-tax contribution to your super, you may be eligible to get up to $500 per year paid into your super account by the government. This is called a co-contribution.
Concessional (before-tax) contributions
The concessional contributions limit, which is the maximum amount you can contribute to your super before-tax, is increasing from $27,500 to $30,000 per financial year. Before-tax salary put directly into super is generally taxed at 15%. If this is less than your marginal income tax rate, this could potentially reduce the amount of tax you pay, while growing your super.
Non-concessional (after-tax) contributions
The non-concessional limit is rising from $110,000 per financial year to $120,000 per financial year. This means you can add more of your after-tax income to your super, if you can afford it. Keep in mind, eligibility may be affected by your total super balance.
Bring-forward rule
With the non-concessional contributions limit increasing to $120,000 per financial year, the bring-forward rule will also change. As the rule allows you to make up to 3 years’ worth of non-concessional contributions in a single financial year, you may be able to put up to $360,000 into your super (eligibility conditions apply).
Preservation age is now 60
From 1 July, the age you need to reach to withdraw your super has increased to 60 for everyone. This means the low-rate cap rule allowing people between 55-60 years old to withdraw up to $235,000 at a lower tax rate (17%) is no longer available.