A new financial year brings with it new superannuation, tax, and other financial related changes. In this article we’ve kicked things off with the superannuation changes, which have an impact on all working Australians, whether you’re in accumulation phase or whether you’re planning for retirement.
Superannuation Guarantee (SG) increase
The SG rate will rise from 11% to 11.5% of an employee’s ordinary time earnings. This means employers will be required to contribute more to their employees’ superannuation accounts, boosting retirement savings.
Contribution caps increase
The concessional (before-tax) contributions cap will increase from $27,500 to $30,000 per year.
The non-concessional (after-tax) contributions cap will rise from $110,000 to $120,000 per year.
Bring-forward rule adjustment
With the increased non-concessional cap, eligible individuals can now contribute up to $360,000 in a single year using the bring-forward rule.
Preservation age
The preservation age for accessing superannuation will reach 60 for all individuals born on or after July 1, 1964.
Super co-contribution scheme
The income thresholds for the government’s super co-contribution scheme will increase. Individuals earning less than $45,400 or up to $60,400 in the 2024-25 financial year may be eligible for up to $500 in government co-contributions.
Catch-up concessional contributions
The opportunity to use catch-up concessional contributions will continue, allowing individuals with a super balance less than $500,000 to utilize unused contribution caps from previous years.
Downsizer contributions
The maximum downsizer contribution remains at $300,000 per person, with no changes to age or superannuation balance restrictions.
Transfer balance cap
The transfer balance cap, which limits the amount that can be transferred to pension mode, remains at $1.9 million.
In addition to superannuation here are some other important financial changes taking effect in Australia for the 2024-25 financial year starting July 1, 2024:
Tax cuts
Significant tax cuts will be implemented, affecting all 13.6 million Australian taxpayers:
– The 19% tax rate will be reduced to 16% for incomes between $18,200 and $45,000.
– The 32.5% tax rate will be lowered to 30% for incomes between $45,001 and $135,000.
– The threshold for the 37% tax rate will increase from $120,000 to $135,000.
– The threshold for the 45% tax rate will rise from $180,000 to $190,000.
Energy bill relief
Households will receive a $300 rebate on their electricity bills, while eligible small businesses will receive $325.
Medicare levy low-income thresholds
These have been increased for 2023-24, exempting more than one million low-income taxpayers from the Medicare levy or reducing their levy rate.
These changes aim to provide financial relief, boost retirement savings, and address cost-of-living pressures for Australians. It’s important for individuals to review their financial strategies and consider how these changes may impact their personal circumstances. To speak with one of our team today on how these changes may affect you and your current or retirement plans please contact us.