Federal Budget 2024-25

ESSSuper - 15 May 2024

The 2024-25 Federal Budget includes a number of changes relating to super and other financial matters.

These proposed Budget changes must pass through Parliament before they come into effect.

We're currently assessing the potential impact of these changes on our members and our systems.

Exploring Super podcast

What might the latest federal Budget mean for your super?

This week, we chat to ESSSuper's Defined Benefit Technical Training Manager, Michael Blackman, about Budget 2024-25 and some of the impacts it could have.

Superannuation measures

Superannuation on Paid Parental Leave (PPL)

• From 1 July 2025, people accessing government-funded paid parental leave will be paid super at 12% of the paid parental leave rate (based on the national minimum wage of $882.75 per week).
• The Australian Taxation Office (ATO) will administer this process, with super payments to be made on an annual basis, from 1 July 2026.

Better Targeted Super Concessions funding

• In last year's Federal Budget, the Government announced a change to the tax treatment of individuals with a total superannuation balance above $3 million.

Enhance the Fair Entitlements Guarantee Recovery Program

• From 1 July 2024, the Government will recalibrate the Fair Entitlements Guarantee Recovery Program to pursue unpaid super entitlements owed by employers in liquidation or bankruptcy.

SuperStream Gateway Network Governance Body

• The Government will provide $2.7 million over four years from 2024–25 (and $0.7 million per year ongoing) to support the SuperStream Gateway Network Governance Body.
• The Body manages the integrity of the Superannuation Transaction Network, which allows members (i.e. employers and superannuation funds) to transmit contribution data. The Body's funding is provided through the ATO.

Other measures

The Federal Budget 2024-25 includes a range of additional measures which may also affect a person's income and/or financial position in retirement.

Revised stage 3 tax cuts

• Reduce the 19% tax rate to 16%
• Reduce the 32.5% tax rate to 30%
• Increase the income threshold above which the 37% tax rate—applies from $120,000 to $135,000
• Increase the income threshold above which the 45% tax rate—applies from $180,000 to $190,000.

Power bill relief

• The Government is providing $3.5 billion of energy bill relief to all households and eligible small businesses.
• From 1 July 2024, more than ten million households will receive rebates of $300 on their energy bills, while around one million small businesses will receive $325.

Freezing social security deeming rates

• The Government is supporting social security recipients to manage cost of living pressures by freezing social security deeming rates for financial investments at their current levels until 30 June 2025.
• This will benefit around 876,000 income support recipients, including around 450,000 Age Pensioners.

Improving payment times to small businesses and support for payday super

• The Government is investing a further $25.3 million to improve payment times to small businesses.
• The additional support will also start to prepare businesses for the move to payday super.

Improvements to the aged care system

The Government is providing funding for a number of aged care measures, including:

• $2.2 billion to further deliver on aged care reforms including an additional 24,100 home care packages
• $110 million to support increased supervision of aged care quality
• $1.2 billion to implement improved digital systems
• Support for an increase in award wages in the sector in addition to previous interim increases.

Strengthening the ATO against fraud

• $187.4 million is being provided to better protect taxpayer data and Commonwealth revenue against fraudulent attacks on the tax and superannuation systems.
• This funding will upgrade the ATO's information and communications technologies and increase their fraud prevention capabilities.

We're here to help

We're committed to empowering you to make informed decisions about your super.

On 5 and 6 June, we'll be running webinars designed to help you find out how the proposed Federal Budget 2024-25 changes, as well as changes coming into effect from 1 July 2024, could affect your super – from the comfort of your home. Reserve your place now on our Education events web page.

We encourage you to speak to our experienced consultants for information and general advice about your super. To learn more or book a virtual appointment, please submit an online enquiry.

This article is based on information currently available about the Federal Budget 2024-25 announced on 15 May 2024 and is subject to change. ESSSuper has made reasonable efforts to ensure the accuracy of this information but does not accept liability for acts or omissions based on its content.

Emergency Services Superannuation Board (ABN 28 161 296 741) (ESSB), the Trustee of the Emergency Services Superannuation Scheme (ABN 85 894 637 037) (ESSSuper).

The information contained in this article is of a general nature only. It should not be considered as a substitute for reading ESSSuper's Product Disclosure Statement (PDS) that contains detailed information about ESSSuper products, services and features. Before making a decision about an ESSSuper product, you should consider the appropriateness of the product to your personal objectives, financial situation and needs. It may also be beneficial to seek professional advice from a licensed financial planner or adviser. An ESSSuper PDS is available at esssuper.com.au/pds or by calling 1300 650 161.