There were no major changes for superannuation, with the focus of the Budget on cost-of-living relief and responding to the challenges of the global economy.
The only measure specific to superannuation in the Budget was a restatement of the government’s commitment to reducing the eligibility age for the downsizer contribution from 60 to 55. This measure is currently before the Senate as part of the Treasury Laws Amendment (2022 Measures No. 2) Bill, and no changes to the measure were announced in the Budget.
As a further incentive to older Australians to downsize their homes, the government will also extend the assets test exemption for income support recipients for the proceeds of the sale of a principal home from 12 months to 24 months. It will also change the income test, to apply only the lower deeming rate (currently 0.25 per cent) to the principal home sale proceeds when calculating deemed income for 24 months after its sale.
There were several other measures that may be of interest to super fund trustees and employer sponsors.
One of the key Budget measures is a “Housing Accord” which includes initial funding of $350 million over five years from 2024-25 to support funding of an additional 10,000 affordable homes under an Accord with state and territory governments and other key stakeholders.
The ultimate goal of the scheme is one million new homes to be delivered over that five-year period. Commonwealth support under the Accord will include what are described as “availability payments” over the longer term to facilitate institutional investment, including by superannuation funds, in affordable homes. These will take the form of an ongoing funding stream to help cover the gap between market rents and subsidised rents under the Accord.
The Budget included a long list of measures that had been announced but never legislated by the previous government and will now not proceed. Relevant to superannuation, these include:
There will be a deferral of the start dates of a number of other tax and superannuation measures announced by the previous government but never legislated. These will include the 2021–22 Budget measure that proposed relaxing residency requirements for SMSFs, which will be deferred from 1 July 2022 to the income year commencing on or after the date of Royal Assent of the enabling legislation.
The government will align the tax treatment of off-market share buy-backs undertaken by listed public companies with the treatment of on-market share buy-backs. This measure will apply from announcement on Budget night (7:30pm AEDT on 25 October 2022). The Budget papers describe this measure as intended to improve the integrity of the tax system, and it is estimated to save $550 million over the four years from 2022-23.
The Government will increase the amount of the Commonwealth penalty unit from $222 to $275, from 1 January 2023. The increase will apply to offences committed after the relevant legislative amendment comes into force. The amount will continue to be indexed every three years in line with increases in the Consumer Price Index in accordance with the existing schedule, with the next indexation to occur on 1 July 2023. This will increase the penalties payable for breaches of various legislation including the SIS Act.
As previously announced, the Budget confirmed funding for the expansion of the paid parental leave scheme so that it will be payable for 26 weeks by 1 July 2026. However, there was no mention of payment of super contributions on paid parental leave.
