What superannuation policies are party candidates proposing?
Published 12 Apr 2019
With the Australian election fast approaching, policies of the major parties are being revealed – including big changes for superannuation laws. Here, we break down the proposals presented by each of the major parties, and what it means for your superannuation fund.
Labor’s proposed changes
One of the major changes the Labor Party has proposed is to allow super contributions for payments made under parental leave, with changes coming into effect in July 2020. The Superannuation Guarantee will be distributed for Paid Parental Leave and Dad and Partner Payments, assisting in closing the superannuation gap between men and women. Labor further seek to omit a rule that currently prohibits people earning under the AU$450 threshold per month from obtaining super levy. Labor proposes that Superannuation Guarantee payments will cover wages and parental leave under this amount, with an aim to reduce the threshold to zero by July 2024.
Labor have also promised to raise the super guarantee to 12 per cent, meaning employers will be expected to pay more into employees superannuation funds. The increase is set to come into action in July 2021, with a gradual increase until the 12 per cent mark is reached in 2025.
Coalition’s proposed changes
The main theme of the changes proposed by the Coalition is for older Australians to keep contributing to their super. Currently, your spouse needs to be under 69 years old to be able to contribute to your superannuation. Under the Coalition’s changes, spouses aged up to 74 years old will be able to deposit money into their partner’s nest egg. This change may transform the retirement strategy for many Australians, however, will only benefit those who have the financial means to make the extra contributions.
Rules around voluntary contributions are set to change in a Coalition government, too. The work test rules will be changed, too. Current rules state that in order to make voluntary superannuation contributions, Australians need to work a minimum of 40 hours per month. Under the proposed changes, this rule will be altered to allow contributions to be added up to AU$500,000 for those between 65 and 67 years of age, no matter the hours they work.
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