It was a quiet budget for super this year, as the Federal Government focused on offsetting the rising cost of living in the lead-up to the federal election. A halving of the fuel excise, and one off payments to some Australians were among the measures announced.
It was pleasing to see some short-term cost of living relief announced. The rising cost of living highlights the importance of also addressing long-term problems, including the lack of affordable housing in many areas – an issue that is always front of mind for many of our members right across Australia. As a fund, we would have liked to see initiatives aimed at helping more Australians gain access to safe and secure housing close to where they live and work.
Given the budget comes just weeks after International Women’s Day, it was equally disappointing that very little was done to address the gender pay gap or the superannuation gap – two issues with a real impact on the economic security of Australian women.
A full run-down of all measures announced can be found at Budget 2022-23.
This year the major announcement for super was an extension to the temporary minimum drawdown rate for retirees with account-based pensions.
Extension to the temporary minimum drawdown rate
What does this mean?
By law, retirees with account-based pensions and other similar products must withdraw a minimum income amount each year. The amount retirees are required to withdraw depends on their age.
Last year’s budget announced a temporary reduction of 50% in the superannuation minimum drawdown requirements. The aim was to help retirees manage the impact on their super savings of market volatility created by the COVID-19 pandemic. In this year’s budget the 50% reduction in the minimum drawdown requirement was extended for a further year, to 30 June 2023.
What it means for you
This is good news for retirees who may not need to sell investment assets to fund minimum drawdown requirements in markets which remain volatile.
If you would like to understand more about what market volatility means for your super, you can read our blog and watch our video here.
Measures from last year’s budget to come into effect
Finally, it’s important to note that some of the key superannuation initiatives announced in last year’s budget will take effect on 1 July 2022.
We're here to help
If you’re an Aware Super member and want to know how you could make the most of this measure, a superannuation adviser can answer your questions. Best of all, you don’t pay extra for this simple advice service2 – it’s all part of your membership.