Latest news with #SuperGuarantee
Perth Now
20-07-2025
- Business
- Perth Now
Huge cost-of-living move coming this week
Australians are weeks away from receiving a 20 per cent cut to their student debt, with Labor vowing to scrap HECS and HELP debt as the government's first priority once parliament resumes, following the government's landslide election victory. The changes will be applied to all student debts as they on June 1, 2025, with the average HELP debt of $27,600 set to receive a reduction of about $5520. The HECS reform will also reduce the repayment threshold for debts from $56,156 to $67,000. Rates of repayments will also be lowered then current levels, with someone on $70,000 paying $1300. Despite the Coalition not supporting the measure during the campaign, education spokesman Jonno Duniam said he expected the Bill to 'pass' parliament. Labor will pursue action on its election vows to slash student debts and introduce paid prac ahead of parliament returning on Tuesday. NewsWire/ Nicholas Eagar Credit: NewsWire Speaking to the ABC on Sunday, he said that while the legislation would still need to go through party room and shadow cabinet, he believed 'the Australian people spoke pretty clearly … around the policies the Labor Party took,' adding the party was 'not really in the business of standing in the way of cost of living relief'. Labor will also seek to introduce its cost-of-living election promises, including the $150 energy rebate top up, the 30 per cent discount on home batteries, paid prac measures for student nurses, teachers, social workers and midwives, plus a $10,000 cash bonus for trainee builders who finish their construction apprenticeship. It will also begin work on legislating a two-week increase for Government Paid Parental Leave and laws to add superannuation on government paid parental leave, while also increasing the Super Guarantee to 12 per cent. Education Minister Jason Clare will also use the first sitting week to introduce Bills to tighten protection settings in childcare centres, including provision to allow anti-fraud officers to inspect centres with a warrant or police supervision. The Coalition has also said it's open to working with the government to get the Commonwealth to pull funding on centres which fail to meet safety standards after a Victorian former childcare worker Joshua Brown was hit with more than 70 child abuse charges. While Labor holds a thumping 94-seat majority, out of a total 150 seats, in the Lower House, the government will still need to negotiate with either the Greens (which hold 10 seats), the Coalition's 27 senators, or the 10-member crossbench. Politicians are set to return to Canberra on Tuesday for the first sitting fortnight of the 48th parliament. NewsWire/ Martin Ollman Credit: News Corp Australia After an election bloodbath, the Coalition will return with a significantly reduced 43 seats, while the Greens have been reduced to a single seat. Ahead of the official opening of the 48th parliament, Sussan Ley warned that while the Coalition would 'provide a constructive path for any legislation that makes Australia stronger,' it's 'good will is not a blank cheque'. As it stands, the opposition has already vowed to fight Labor's proposed superannuation tax on balances over $3m, with the Coalition also set to eye accidentally released treasury advice to Jim Chalmers which urged him to consider new taxes to increase the budget outlook. 'Anthony Albanese is yet to explain why his departmental officials secretly advised the Treasurer that Labor would need to raise taxes on Australians,' the Opposition Leader said. 'We will seek answers on behalf of Australian taxpayers, not one of whom should face a new tax that they didn't vote for.' It will also continue to attack Labor over its handling of Australia-US relations, following further fallout from Donald Trump's tariff trade war, with Anthony Albanese yet to secure a meeting with the US President.
SBS Australia
01-07-2025
- Business
- SBS Australia
What is the Super Guarantee, and how will it affect you?
What is the Super Guarantee, and how will it affect you? Published 1 July 2025, 9:17 am It's the start of the new financial year, and there are many new changes coming into effect. Superannuation is a big change — one that affects every working Australian. From today, the Superannuation Guarantee rises for the final time, after gradually increasing annually from 9 per cent to 12 per cent. This is the compulsory contribution your employer must tip into your super fund, and has boosted Austraila 's retirement savings pool into one of the largest in the world.
Sydney Morning Herald
13-06-2025
- Business
- Sydney Morning Herald
Seven steps to boost your super this tax time
A $10,000 contribution from someone earning $90,000 could save around $1,500 in tax - and grow in a low-tax environment for decades to come. Use carry-forward rules If you've had years where you didn't put much into super, because of part-time work, caring duties, self-employment, or just life getting in the way, the tax office actually gives you a second chance. Done right, super is still the most powerful, tax-friendly wealth builder we've got. It's called the carry-forward concessional contribution rule. If your super balance was under $500,000 at the end of last financial year, you can contribute more than the usual $30,000 cap this year by using up your unused limits from the past five years. This is ideal if you've had a good income year, sold a property or business, or finally have a bit of breathing room to focus on your future. It's one of the most generous rules in the system - and it's there for people who didn't have the chance to build up their super earlier in life. Your fund won't track this for you, so check your carry-forward amounts through myGov, or ask your accountant or adviser to help you work it out. Set up salary sacrifice From July 1, the Super Guarantee – that's the compulsory amount your employer puts into your super – is going up, to 12 per cent of your salary. That's a win. But if you really want to take control of your retirement income, consider adding a bit extra through salary sacrifice. Salary sacrifice means asking your employer to send a portion of your pre-tax pay straight to your super. It reduces your taxable income, so you pay less tax, and the money goes into super where it's taxed at just 15 per cent – usually much lower than what you're paying personally. Even small amounts make a big difference. Let's say you're earning $85,000 and salary sacrifice $5,000. That $5,000 would've been taxed at 30 per cent if you took it as salary – but in super, you save around $750 in tax. And that money keeps working for you, year after year. Loading It's easy to set up. Just ask your HR or payroll team, nominate the amount, and they'll sort it. Start with 2 per cent or 3 per cent if that feels manageable. You probably won't notice it missing from your take-home pay, but your super balance will definitely notice it in 10 years time. Balance your super with your partner It's common for one partner in a couple to have much more super than the other - especially if one took time out of the workforce or earned less over the years. Sometimes that's fine, but in other cases, it makes sense to even things out. If one of you is getting close to the transfer balance cap (currently $2 million), or you want to maximise your combined tax-free income in retirement, rebalancing now can help. You can split up to 85 per cent of last year's concessional (pre-tax) contributions with your spouse using a process called Contribution Splitting. It doesn't reduce your current year's cap, and it's just a simple form. But it does need to be done before June 30 if you want it counted for this year. Your fund will have the form on their website, so don't leave it to the last minute. Check how your super is invested Most people stay in their fund's default investment option, but that might not match your strategy any more. If you're getting closer to retirement, now's the time to make sure your investments are working for the phase you're entering. That doesn't mean going ultra-conservative. In fact, staying exposed to growth is usually smart. Retirement can last 20 to 30 years, and you need your money to keep growing. But you might want to pair that with a short-term cash or conservative bucket to cover the first few years of income needs. That way, your longer-term investments can ride the ups and downs of the market, while your cash flow stays steady. It's not about de-risking everything. It's about being strategic and setting yourself up to sleep at night, no matter what the market's doing. Check your beneficiary nomination It's one of the easiest things to forget – but one of the most important. Your super doesn't automatically follow your will when you die, which means if you haven't lodged a valid beneficiary nomination with your fund, the money could get tied up in delays or disputes. In most funds, nominations expire every three years, and many people don't realise theirs has lapsed. It's one of the biggest reasons life insurance payouts get stuck in the system, held up in admin limbo just when families need them most, something we've been hearing a lot about in the media. So take five minutes. Log in to your fund, check who you've nominated, and make sure it still reflects your wishes. If it's not valid, update it now - future you (and your loved ones) will be glad you did. Check that your super is in the retirement phase If you've left work, turned 65, or reached your preservation age and permanently stopped working, you're likely eligible to move your super into what's called retirement phase. And while there's no hard deadline to do this before June 30, tax time is the perfect moment to check that your money is set up the right way. When your super is still in accumulation phase, the investment earnings inside your account are taxed at 15 per cent. But once your money moves into retirement phase, those earnings become completely tax-free. So if you've already retired but haven't made the switch, you could be leaking money quietly to the tax office without realising it. The switch doesn't happen automatically. You need to ask your fund or set up an account-based pension to start drawing down your balance. Once you do that, you'll also be required to take at least a minimum annual income from your account, starting at 4 per cent and increasing as you get older. You can take more. Loading This isn't something you have to rush before June 30, but it's absolutely worth reviewing as part of your tax time tidy-up. Every extra month you spend in accumulation phase after retiring is another month your super earnings are being taxed unnecessarily, and that's easy money to save. EOFY can be a good time to take your super and tax savings seriously. To clean things up, maximise your benefits, and make sure your super is working for your version of retirement, not just ticking along in the background.
The Age
13-06-2025
- Business
- The Age
Seven steps to boost your super this tax time
A $10,000 contribution from someone earning $90,000 could save around $1,500 in tax - and grow in a low-tax environment for decades to come. Use carry-forward rules If you've had years where you didn't put much into super, because of part-time work, caring duties, self-employment, or just life getting in the way, the tax office actually gives you a second chance. Done right, super is still the most powerful, tax-friendly wealth builder we've got. It's called the carry-forward concessional contribution rule. If your super balance was under $500,000 at the end of last financial year, you can contribute more than the usual $30,000 cap this year by using up your unused limits from the past five years. This is ideal if you've had a good income year, sold a property or business, or finally have a bit of breathing room to focus on your future. It's one of the most generous rules in the system - and it's there for people who didn't have the chance to build up their super earlier in life. Your fund won't track this for you, so check your carry-forward amounts through myGov, or ask your accountant or adviser to help you work it out. Set up salary sacrifice From July 1, the Super Guarantee – that's the compulsory amount your employer puts into your super – is going up, to 12 per cent of your salary. That's a win. But if you really want to take control of your retirement income, consider adding a bit extra through salary sacrifice. Salary sacrifice means asking your employer to send a portion of your pre-tax pay straight to your super. It reduces your taxable income, so you pay less tax, and the money goes into super where it's taxed at just 15 per cent – usually much lower than what you're paying personally. Even small amounts make a big difference. Let's say you're earning $85,000 and salary sacrifice $5,000. That $5,000 would've been taxed at 30 per cent if you took it as salary – but in super, you save around $750 in tax. And that money keeps working for you, year after year. Loading It's easy to set up. Just ask your HR or payroll team, nominate the amount, and they'll sort it. Start with 2 per cent or 3 per cent if that feels manageable. You probably won't notice it missing from your take-home pay, but your super balance will definitely notice it in 10 years time. Balance your super with your partner It's common for one partner in a couple to have much more super than the other - especially if one took time out of the workforce or earned less over the years. Sometimes that's fine, but in other cases, it makes sense to even things out. If one of you is getting close to the transfer balance cap (currently $2 million), or you want to maximise your combined tax-free income in retirement, rebalancing now can help. You can split up to 85 per cent of last year's concessional (pre-tax) contributions with your spouse using a process called Contribution Splitting. It doesn't reduce your current year's cap, and it's just a simple form. But it does need to be done before June 30 if you want it counted for this year. Your fund will have the form on their website, so don't leave it to the last minute. Check how your super is invested Most people stay in their fund's default investment option, but that might not match your strategy any more. If you're getting closer to retirement, now's the time to make sure your investments are working for the phase you're entering. That doesn't mean going ultra-conservative. In fact, staying exposed to growth is usually smart. Retirement can last 20 to 30 years, and you need your money to keep growing. But you might want to pair that with a short-term cash or conservative bucket to cover the first few years of income needs. That way, your longer-term investments can ride the ups and downs of the market, while your cash flow stays steady. It's not about de-risking everything. It's about being strategic and setting yourself up to sleep at night, no matter what the market's doing. Check your beneficiary nomination It's one of the easiest things to forget – but one of the most important. Your super doesn't automatically follow your will when you die, which means if you haven't lodged a valid beneficiary nomination with your fund, the money could get tied up in delays or disputes. In most funds, nominations expire every three years, and many people don't realise theirs has lapsed. It's one of the biggest reasons life insurance payouts get stuck in the system, held up in admin limbo just when families need them most, something we've been hearing a lot about in the media. So take five minutes. Log in to your fund, check who you've nominated, and make sure it still reflects your wishes. If it's not valid, update it now - future you (and your loved ones) will be glad you did. Check that your super is in the retirement phase If you've left work, turned 65, or reached your preservation age and permanently stopped working, you're likely eligible to move your super into what's called retirement phase. And while there's no hard deadline to do this before June 30, tax time is the perfect moment to check that your money is set up the right way. When your super is still in accumulation phase, the investment earnings inside your account are taxed at 15 per cent. But once your money moves into retirement phase, those earnings become completely tax-free. So if you've already retired but haven't made the switch, you could be leaking money quietly to the tax office without realising it. The switch doesn't happen automatically. You need to ask your fund or set up an account-based pension to start drawing down your balance. Once you do that, you'll also be required to take at least a minimum annual income from your account, starting at 4 per cent and increasing as you get older. You can take more. Loading This isn't something you have to rush before June 30, but it's absolutely worth reviewing as part of your tax time tidy-up. Every extra month you spend in accumulation phase after retiring is another month your super earnings are being taxed unnecessarily, and that's easy money to save. EOFY can be a good time to take your super and tax savings seriously. To clean things up, maximise your benefits, and make sure your super is working for your version of retirement, not just ticking along in the background.
NZ Herald
30-05-2025
- Business
- NZ Herald
Compulsory KiwiSaver: It's time NZ had a serious debate about it – Fran O'Sullivan
That council was set up by former Labour Prime Minister Dame Jacinda Ardern and chaired in 2019 by current PM Luxon, who was at that stage chief executive of Air New Zealand, before he passed the baton to Whineray on leaving the airline. Whineray says that after presenting KiwiSaver reform ideas to Ardern in late 2019 'she quipped that I was 'in danger of becoming a socialist'.' 'I replied that 'I was more of a caring capitalist' – and that the time had come to evolve KiwiSaver.' Call it KiwiSaver 2.0.' The council had lofty goals. It produced papers on the 'infrastructure crisis', the world of work, immigration and education and more. However, the Covid pandemic resulted in the Ardern Government losing its focus on reform, at least as far as business was concerned. The council's expertise was not harnessed in the way chief executives had expected when they took up Ardern's invitation to join the council. With Luxon now PM, Whineray is having another shot. As he puts it, the 2.5-page proposal was designed to evolve KiwiSaver into something fit for purpose by 2030: a 'serious economic engine and a foundation for personal dignity, resilience, and independence'. In essence, the then council believed there was an opportunity to enhance the KiwiSaver framework to achieve more equitable outcomes via a transition over 10 years to a compulsory savings scheme, with the objective of achieving minimum annual contributions of 10% of personal income by 2030. Six years on and Nicola Willis' second Budget has moved to increase KiwiSaver contributions to 4% of wages or salaries by 2028 by employers and employees – essentially 8% of personal income. It remains an 'opt-in' scheme – it is not compulsory. In Australia, employer contributions, known as the Super Guarantee, are currently 11.5% of an employee's ordinary time earnings. From July 1 this year, that rate will increase to 12%. A massive pool of savings has been built up in Australia since its compulsory superannuation scheme was introduced. Whineray's intervention is timely. Both Luxon and Willis have reopened the discussion on superannuation – particularly on extending the age of eligibility for universal New Zealand Superannuation from 65 to 67 years beginning in 2044. But their coalition partner New Zealand First baulks at that. Whineray contends gaining political support for making KiwiSaver compulsory and increasing the contribution rate should not be too difficult. He points to the fact that NZ First leader Winston Peters pushed for compulsory savings in the 1990s. Former Labour Finance Minister Sir Michael Cullen launched KiwiSaver in 2007 and the New Zealand Super Fund in 2001. Both Luxon and Willis reopened debate in Budget 2025. There is the ability to begin a cross-party dialogue to build wide support for compulsory super. As a parting shot on LinkedIn, Whineray contended that universal NZ Super at 65 won't survive demographic gravity. If people don't save, taxpayers still carry the cost. The freedom to opt out likely becomes a redistribution from those who opt in – 'even if total savings rates don't shift on average, they do shift for the people who don't currently save'. Whineray's is a welcome contribution to the superannuation debate. It's become commonplace to blame the Boomers for the NZ Super iceberg coming taxpayers' way. Superannuation is the largest and fastest-growing welfare expense, increasing from $13 billion in 2017 to a projected $29b in 2029. That is a 25% increase from the projected $23.2b for 2025 in just five years. In reality the first of the Generation X cohort will themselves be coming on to NZ Super in 2030. It is not simply a 'blame the Boomers' issue. It is also reality that Boomers' expectations to have super at what was then the retirement age of 60 were shattered by the Bolger Government, which sensibly raised the age of eligibility to 65 within a decade. Generation X is in a position to lead the debate now to ensure the age of eligibility for NZ Super is lifted again – this time to 67 or beyond. It's getting tiresome to hear and read repeated arguments by media personalities that range from blaming Boomers for not having enough babies (ie future taxpayers to support the scheme), to 'Luxon won't be able to build support to raise the age' and finally and more irksome 'I've paid taxes all by life and hence I want my national super at 65″. There is a role for the media in leading this debate, not simply fostering the thinking that leads to full-on fiscal crisis.
