BUDGET BULLETIN 2022-23
There was only one industry-wide superannuation measure in this year’s budget and that related to the extension of the existing reduction of 50 percent on minimum drawdown rates for account-based pensions until June 2023.
There were no changes to the way superannuation is taxed, nor were there any changes to the concessional or non-concessional contribution caps. Likewise, there were no measures to address the superannuation gap experienced by women or the gender pay gap.
The focus was an $8.6 billion cost-of-living package that cuts petrol tax by 22 cents a litre for six months, offers low and middle-income earners a one-off bonus tax rebate of $420, and delivers $250 cheques to six million pensioners and welfare recipients.
Extension of minimum drawdown rate
The 50 percent reduction of the superannuation minimum drawdown requirements for account-based pensions and similar products has been extended for a further year until 30 June 2023.
The minimum drawdown requirements determine the minimum amount of a pension that a retiree must draw from their superannuation each year. This change is good for retirees looking for more flexibility to manage their income and avoid selling assets in order to satisfy the minimum drawdown requirements.
Women’s budget statement
A separate women’s budget statement was issued where the government committed to narrowing the gender pay gap and the gender superannuation gap by continuing to support increased participation.
The statement also noted:
Lower workforce participation and differences in earnings impact women’s superannuation balances at retirement age. In 2018-19, the gender gap in median superannuation balances for persons aged 60-64 was 23.4 percent.
Lower financial security and independence put women at higher risk of poverty in old age and can make it harder for women experiencing family and domestic violence.
The superannuation gap is expected to narrow over time on account of the narrowing in the gender pay gap, increases in women’s workforce participation and the maturing of the superannuation system.
Getting more women into the workforce and into higher paying jobs is the most meaningful way to increase superannuation balances.
Review the budget papers here.
Information for this document was sourced from the Federal Budget papers, the Association of Superannuation Funds of Australia and the Australian Institute of Superannuation Trustees.