The focus of this year’s Federal Budget announcement was on initiatives designed to address the rising cost of living in Australia.
The only super related change was the extension of the 50% reduction on minimum drawdown rates for account based pensions until 30 June 2023.
There were no changes to the way superannuation is taxed or any changes to concessional or non-concessional contribution caps.
Full details on these and other initiatives from the 2022 budget are available at www.budget.gov.au.
Important note: Remember the initiatives outlined in the budget announcement and included in this article need to be legislated before they come into effect.
The Government has extended the 50% reduction of the superannuation minimum drawdown requirements for account based pensions and similar products (such as transition to retirement pensions, term allocated pensions and annuities) up until June 2023.
These reduced rates were due to end on 30 June 2022 but will now continue for a further year. The Government stated that this was to address ongoing volatility within investment markets due to the war in Ukraine and the continuing global recovery from Covid-19.
The extended temporary minimum drawdown rates for the 2021/22 and 2022/23 income years are as below:
Temporary Reduced Rates
|65 to 74||2.5%||5.0%|
|75 to 79||3.0%||6.0%|
|80 to 84||3.5%||7.0%|
|85 to 89||4.5%||9.0%|
|90 to 94||5.5%||11.0%|
|95 and over||7.0%||14.0%|
Proposed start date: Continuation of existing arrangements
The government has halved the tax (excise and excise equivalent customs duty) paid on petrol, diesel and all other fuel and petroleum based products, except aviation fuels for a period of 6 months from 44.2 cents per litre to 22.1 cents per litre.
This measure will help ease some of the inflationary pressure being experienced in Australia and is scheduled to be in place until 11:59pm on 28 September 2022.
Proposed start date: 12:01am 30 March 2022
The Government will provide a one-off, tax-exempt payment of $250 to eligible pensioners, welfare recipients, veterans and concession card holders.
The one-off payment will be automatically paid to eligible recipients in April 2022 with more than half of those receiving the payment being pensioners.
Proposed start date: April 2022
The Government will introduce a $420 cost of living tax off-set for low and middle income earners for the 2021/22 tax year. This is linked to the existing tax off-sets and thresholds for low and middle income earners.
The additional off-set will automatically be added to existing off-sets and applied when an eligible individual submits their tax return for the 2021/22 tax year.
Proposed start date: April 2022
The Government is introducing a single Paid Parental Leave scheme which integrates the existing Paid Parental Leave scheme with the Dad and Partner Pay. The single scheme will apply equally to family units or single parents and provides 20 weeks of paid parental leave to be used how the household sees fit.
In addition, the Government is broadening the income test to include household income up to $350,000 per year. Changes also mean eligible single parents will be able to access an additional two weeks of Paid Parental Leave.
Proposed start date: 1 July 2022
The Pension Loans Scheme was renamed the Home Equity Access Scheme from 1 January 2022. This is to ensure that more people of Age Pension age can participate in the scheme. The policy therefore expands eligibility to those of Age Pension age who own a home.
Proposed start date: 1 January 2022
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