Budget 2014: Superannuation & Social Security

Superannuation

Changes to the Superannuation Guarantee (SG) increase

On 1 July 2014 the 9.25% SG will increase by 0.25%. The Government proposes to then freeze future increases until 1 July 2018, at which time it will increase to 10%. It will then increase by 0.5% each year until it reaches 12% by 1 July 2022. 

Excess non-concessional contributions (NCC)

There is a limit on the amount of NCCs you can make to superannuation each year. If you contribute more than this, the additional amount is generally taxed at the top marginal tax rate.

The Government proposes changes to allow individuals to withdraw excess NCCs, along with associated investment earnings, made after 1 July 2013. Where this occurs only the associated earnings will be taxed at the individual’s marginal tax rate. In the event that excess NCCs are left in superannuation they will be taxed at the top marginal tax rate.

Social Security

Changes that relate to Centrelink and Department of Veterans Affairs (DVA)

There are a number of changes the Government proposes in relation to Centrelink and DVA payments that will commence at different times over the next few years. These include:

  • Age Pension qualifying age is to be increased to 70 (from age 67) by 1 July 2035. This measure will look at increasing the Age Pension age from 1 July 2025 by six months each two years until it reaches age 70 by 1 July 2035. You will only be affected by this measure if you were born on or after 1 July 1958.

People born between

Eligible for Age Pension at age

1 July 1952 and 31 December 1953

65½

1 January 1954 and 30 June 1955

66

1 July 1955 and 31 December 1956

66½

1 January 1957 and 30 June 1958

67

1 July 1958 and 31 December 1959

67½

1 January 1960 and 30 June 1961

68

1 July 1961 and 31 December 1962

68½

1 January 1963 and 30 June 1964

69

1 July 1964 and 31 December 1965

69½

1 January 1966 and later

70

 

  • The ‘Housing Help for Seniors’ pilot announced in the 2013-14 Budget will no longer take place.
  • Disability Support Pension (DSP) recipients under age 35 with an assessed work capacity of eight hours or more a week who have a participation plan will have compulsory activities. In addition the portability requirements for all DSP recipients traveling overseas will be tightened from 1 January 2015.
  • From 1 July 2017 the Income and Assets Test thresholds for the Age Pension, Carer Payment, DSP and the Veterans’ Service Pension will be frozen for three years. 
  • From 1 September 2017, increases in the Age Pension, DSP, Carer Payment, Bereavement Allowance and Veterans’ Affairs pensions will be linked to the consumer price index (CPI) only. For recipients of Parenting Payment Single, the measure will start on 1 July 2014. 
  • From 20 September 2017 the deeming thresholds will be reset to $30,000 for singles and $50,000 for couples. 

 If you would like more information on the above, please call us on (07) 4771 4577