Superannuation remains secure in uncertain times

BudgetSuperannuation

30 March 2022

The main focus for the pre-election Federal Budget 2022-23 was on the cost of living and measures to provide relief. Consequently, there was very little on the superannuation front, which does not come as a surprise given the ongoing uncertainty in Europe, and Australia’s ongoing recovery from the pandemic.

In fact, the only relevant update was the continuity of the Government’s existing 50% reduction in required minimum pension drawdowns until 30 June 2023 and a commitment to not increasing superannuation taxes under a Morrison Government.

Originally introduced as a response to the pandemic, the 50% pension reduction[1] has now been in place since March 2020. The table below shows the comparison.

Age

2014 to 2019 income years (pre-pandemic)

2020 to 2023 income years (50% reduction)

Under 65
4.0%
2%
65 - 74
5.0%
2.5%
75 - 79
6.0%
3%
80 - 84
7.0%
3.5%
85 - 89
9.0%
4.5%
90 - 94
11.0%
5.5%
95 or more
14.0%
7%

Mr. Frydenberg went on to post on Twitter, “The Coalition has a clear message for older Australians - your super is safe with us”.

This is welcome news for retirees with adequate cash flow to ride out this period of market volatility, so they won’t have to liquidate superannuation assets to comply with pre-pandemic levels of pension drawdowns.

Check out the full coveragefrom the Federal Budget 2022-23, which will continue to develop throughout the week as new insights and video content are published.

[1] Based on a member’s pension account balance as at the end of the previous financial year. If a new pension was commenced during the current financial year, then any reduction factor will need to be prorated.

Author: Naween Fernando

Naween joined the firm in 2002 as a Graduate and over that time has progressed to Associate Partner and now heads up the SMSF Team in Melbourne. He has a wealth of experience having also worked in the SMSF Audit Team for a number of years. He prides himself on delivering exceptional client service, identifying value-add opportunities and works closely with the Business Advisory and Wealth Management teams where service delivery extends across multiple service lines.