Federal Budget 2023‑24: What it means for super

Commonwealth Treasurer Jim Chalmers delivered the Labor government’s second Budget on Tuesday 9 May 2023, which included some measures relating to super in Australia.

To help you stay informed, we’ve summarised the proposed super changes here for you. You can also read about the increase to the Superannuation Guarantee (SG) and other standard annual increases coming into effect on 1 July 2023.

What is proposed in the latest Budget and what does it mean for your super?

Proposed changes to tax for superannuation accounts over $3 million

From 1 July 2025, future earnings (including unrealised gains) on the amount of superannuation balances over $3 million may be taxed at an increased rate. 

The Federal Government is developing the details of this proposal, including how this may apply to people who have a Defined Benefit and Public Sector account.

Australian Taxation Office (ATO) given extra funding to address unpaid superannuation

The ATO will be given an additional $40.2 million to identify and pursue employers that fail to pay or underpay super to their employees. This will also mean an increase in fines for those who pay late – or not at all. The prediction from the Federal Government is that this will result in a net of $440 million in recovered super over the next four years.

You can read about unpaid super from your employer on the ATO website.

What's changing in super on 1 July 2023?

Superannuation Guarantee is increasing to 11%

The Superannuation Guarantee (also known as SG or compulsory Employer Contributions) is the minimum super contribution paid into your super by your employer. It’s currently set at 10.5% of your gross super salary and is set to increase progressively until 1 July 2025.

Here are the currently legislated future changes to the SG rate:

Financial year	Superannuation Guarantee Rate
2022-23	10.5%
2023-24	11%
2024-25	11.5%
2025-26 and onward	12%

Source: Australian Taxation Office, Super guarantee percentages, April 2023.

SA Government employees will see their employer contributions increase to 11% on 1 July 2023.

Members of the defined benefit schemes will generally see no change to their benefits, as the benefits they receive from these schemes are certified as being above the minimum rate.

Returning to the standard minimum drawdown rates for income payments

The Federal Government sets the minimum income amount that you must withdraw each financial year from an Income Stream account. The government temporarily reduced these rates in 2020 in response to COVID-19’s impact on investment markets. The reduced rates will cease on 30 June 2023; the standard minimum drawdown rates will apply from 1 July 2023.

If you have a Super SA Income Stream account, refer to the table below to see the minimum drawdown rate for the 2023-24 financial year, based on your age.

Age	Minimum income rate for 2019-20 to 2022-23 income years	Minimum income rate for 2023-24 & later income years
Under 65	2%	4%
65-74	2.5%	5%
75-79	3%	6%
80-84	3.5%	7%
85-89	4.5%	9%
90-94	5.5%	11%
95 or more	7%	14%

Increases to caps

From 1 July 2023, the following caps will increase in line with indexation.

Low rate cap	This is the amount of taxable components of a lump sum payment that are taxed at a lower or nil rate, for those who are under the age of 60 but have reached their Commonwealth preservation age. Increases from $230,000 to $235,000
Untaxed plan cap	This is the amount of untaxed benefits that can be paid at the concessional tax rates from untaxed funds (like Triple S and the Lump Sum Scheme). Increases from $1.65m to $1.705m
Transfer Balance cap	This is the limit set to the total amount of super you can transfer into a tax-free retirement account. Individuals who have opened a retirement account before 30 June 2023 will have a lower personal Transfer Balance cap which can be viewed on ATO online via myGov. Increases from $1.7m to $1.9m