Hey everyone! If you’ve been hearing about changes to superannuation and wondering how they might affect you, this blog post is here to break it down in a simple and easy-to-understand way.
Super on Paid Parental Leave: A Win for Parents
Starting from July 1, 2025, the government will start paying superannuation on Government-funded Paid Parental Leave (PPL). This means if you’re taking time off to care for a new baby or adopted child, your super will keep growing. Payments will be made to your super fund every year starting from July 2026. This change is especially great for parents who often face a dip in their super savings due to career breaks.
Increase in Super Guarantee Rate
From July 1, 2024, the super guarantee rate (the percentage of your salary that your employer contributes to your super) will increase from 11% to 11.5%. This is part of a gradual rise until it hits 12% in 2025. More money in your super means a bigger nest egg for retirement, which can help you pay off your mortgage faster or provide financial security in your later years.
Changes to Super Contribution Caps
There are also changes to the amount you can contribute to your super. From July 1, 2024, the concessional contributions cap (before-tax contributions) will increase from $27,500 to $30,000. The non-concessional contributions cap (after-tax contributions) will go up from $110,000 to $120,000. This gives you more room to boost your super savings and take advantage of tax benefits.
Deeming Rates and Pension Benefits
Good news for retirees! The government has extended the freeze on deeming rates until June 30, 2025. Deeming rates are used to estimate income from your financial assets, and a lower rate means you can receive more in pension payments. This extension helps retirees benefit from higher interest rates without reducing their age pension .
Payday Super: More Frequent Contributions
Starting from July 1, 2026, employers will be required to pay your super at the same time as your salary. This means no more waiting for quarterly contributions—your super will grow more consistently with each paycheck. This change is designed to help Australians build their super savings more effectively over time.
Conclusion
These updates are designed to help Australians build better financial security for the future. Whether it’s through increased super contributions, super on parental leave, or more frequent payday super payments, these changes are all about ensuring you have a healthier super balance when you retire. Stay informed and take advantage of these new opportunities to make the most of your superannuation!
If you have any questions or need more detailed advice, feel free to reach out. We’re here to help you navigate your financial journey!
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