Federal budget highlights: 2024-2025. NGS Super
This year’s federal budget included several announcements that may benefit our members. This included cost of living measures and changes to superannuation which can help Australians put more into their retirement savings and save for their tomorrow.
Cost of living help
Tax cuts
From 1 July, the previously legislated tax cuts will deliver tax savings to 13.6 million Australian taxpayers. The change will deliver an average tax cut of $36 a week.
Electricity
1 July will also see households receive a $300 credit applied to their electricity bills in quarterly instalments – lowering each quarterly bill by approximately $75. In addition, small businesses will get a $325 credit discount.
Deeming rates
A 12-month extension to the freeze on deeming rates will take it out to 1 July 2025. Deeming rates are percentages set by the Australian Government and used by Centrelink to product how much a person will earn from things such as superannuation and investments. This freeze will allow pensioners to benefit fully from increased interest paid on deposits and other investments without reductions to their aged pension.
Superannuation
Increases to Super Guarantee continue
From 1 July, Super Guarantee (SG) contributions increase will increase from 11 to 11.5%. SG contributions are the compulsory payments your employer pays into your super, and the increase from 11 to 11.5% will help Australians save more for their retirement. SG contributions are scheduled to increase again in 2025 to 12%.
Paid Parental Leave
Superannuation will be paid on Government funded Paid Parental Leave (PPL) for parents of babies born or adopted on or after 1 July 2025. Payments will be made to individuals’ super funds from 1 July 2026. The change is expected to benefit approximately 180,000 families and will help reduce the impact that career breaks to care for children has on super balances – particularly for women.
Changes to contributions caps
From July 2025, the concessional tax rate will be applied to future earnings for superannuation balances above $3 million will be 30%, up from 15%. This is expected to apply to around 80,000 people.
Preparing for payday super
Additional support will be provided to help businesses prepare for the move to payday super. This includes initiatives to support cashflow and reduce payment times. Employers have until July 2026 to start paying employees super with their pay cycle.
Education support
HECS/HELP debt
The government plans to wipe $3bn from student debts by indexing HECS and HELP debts to the lower of the consumer price index or the wage price index. This means HECS debt repayments will be adjusted so that they don’t exceed wage growth. This change will be backdated to June 2023.
Training support
People studying to be teachers, nurses, midwives, or social workers may be eligible for approximately $320 weekly payment to help them through practical training and complete their studies.
Other budget announcements
Pay rise for childcare workers
The Government has made provision in the budget to support increased wages for workers in the childcare sector, expected in the Fair Work Commission award wage decision. Increased wages will help ease cost of living pressures and provide for an increase in super savings for workers in the sector.
Aged-Care support
A $2.2 billion package to improve aged care which includes access to 24,100 new home care places to help older Australians stay in their own home rather than entering aged care.
Rent assistance
In an effort to address rental affordability, Commonwealth Rent Assistance will increase by 10 per cent. This measure will benefit nearly 1 million households.
Many of the changes announced in this year’s budget will have a positive impact on some of our members and their families. If you have questions about the budget and would like to find out more, book a free chat with an NGS Super Specialist.
Important information
The information has been prepared by NGS Super Pty Limited ABN 46 003 491 487 AFSL 233 154 the trustee of NGS Super ABN 73 549 180 515. It contains general information only and does not take into account your personal objectives, financial situation or needs. Before acting on this information or making an investment decision, you should consider your personal circumstances and read our Product Disclosure Statement and Target Market Determination for more information. This information is current as at 15 May 2024. The forward-looking statements in this document are not guarantees or predictions and may be subject to change. Care should be taken before relying on these statements.