2022–23 October Federal Budget summary26 Oct 2022 5 min read
While there were no major announcements in the Federal Budget with regards to super, a few measures impact our members. It’s important to remember that the budget measures outlined need to be legislated before they come into effect.
This budget recognises investment in early childhood education, care and parental leave as critical infrastructure that delivers for families and the education sector. It also aims to address the issue of affordable housing and downsizing which is topical for members moving into retirement.
Plan for cheaper childcare
From 1 July 2023, the Government plans to lift the maximum childcare subsidy rates for families earning less than $530,000. They will also introduce a base entitlement to 36 hours per fortnight of subsidised early childhood education and care for families with First Nations children, regardless of activity hours or income level.
It estimates these reforms will increase the hours worked by women with young children by up to 1.4 million hours per week in 2023–24, equivalent to 37,000 full-time workers.
Paid Parental Leave Scheme
From 1 July 2023, changes to the Paid Parental Leave Scheme will mean either parent can claim the payment and both birth parents and non-birth parents are allowed to receive the payment if they meet the eligibility criteria.
Parents will also be able to claim weeks of the payment concurrently so they can take leave at the same time.
From 1 July 2024, the Government will start expanding the scheme by 2 additional weeks a year until it reaches a full 26 weeks from 1 July 2026.
Both parents will be able to share the leave entitlement, with a proportion maintained on a ‘use it or lose it’ basis, to encourage and facilitate both parents to access the scheme and to share the caring responsibilities more equally. Sole parents will be able to access the full 26 weeks.
Superannuation continues to be absent from the scheme.
The Government announced that it will provide $350 million over 5 years from mid-2024 to support funding of an additional 10,000 affordable homes under a Housing Accord. The Accord will seek to facilitate superannuation and institutional capital investment in social and affordable housing. Availability payments will provide over the longer term, to incentivise institutional investment through covering the gap between market rents and subsidised rents.
Lower age threshold for downsizer contributions
The downsizer scheme, which allows you to make a one-off contribution of up to $300,000 ($600,000 for a couple) to your super from the sale of the family home, is currently only available to those aged 60 and above. The eligibility age will change to 55 years, meaning more Australians can take advantage of the scheme. This measure will come into effect from the start of the first quarter after the legislation is passed.
You can read more about the scheme on our downsizer contributions page.
Incentives for downsizing pensioners
The exemption of home sale proceeds from pension assets testing will be extended from 12 months to 24 months. The income test will also change — only the lower deeming rate (0.25 per cent) will be applied to principal home sale proceeds when calculating deemed income for 24 months after the sale.
This will give pensioners more time to purchase, build or renovate a new home before their pension is affected.
Incentives for working pensioners
A one-off $4,000 credit will be added to the work bonus for age pensioners and veteran pensioners.
The temporary top-up means pensioners can earn up to $11,800 in 2022–23 (previously $7,800) before their pension is reduced. Subject to age-based work tests, this measure will see more pensioners earning mandatory super, particularly since the $450 earnings threshold was removed. You can read more about how the work bonus works in our fact sheet Your super and the age pension.
Extended access to the Commonwealth Seniors Health Card
More Australians will have access to the Commonwealth Seniors Health Card, with the income threshold increasing significantly:
|Current income threshold
|New income threshold
The Government will also freeze social security deeming rates at their current levels for a further 2 years until 30 June 2024. This will support older Australians who rely on income from deemed financial investments, as well as the pension, to deal with the rising cost of living.