August 3, 2023 | 4 min read
Summary: There are changes affecting super from 1 July 2023 which could impact you.
There’s been a series of super changes in recent months. Here’s a brief outline of key changes and what they could mean for you.
On 1 July 2023, the compulsory super paid by your employer went up from 10.5% to 11% of your income. That 11% is scheduled to increase by half a percent each year till we hit 12% in 2025.
The intention behind this measure is to see a greater proportion of retirees relying less on the Age Pension and more on their retirement savings.
Until 1 July this year, the maximum amount you could move from super into tax-free retirement super income streams, such as Account-Based-Pensions and Annuities, was $1.7 million (called the ‘transfer balance cap’). Because of indexation, that has now been increased to $1.9 million.
If you had a tax-free retirement pension before 1 July 2023, your cap may only be partially increased and the ATO will calculate your personal transfer balance cap. If you think you may be impacted, speak with the ATO or your accountant. You can also check your personal transfer balance cap via your myGov account.
Australians born on or after 1957 will have to wait until they’re 67 years old—up from 66 years and six months—before they can apply for the Age Pension.
This increase also applies to the Commonwealth Seniors Healthcare Card.
In addition to your age, to receive the Age Pension you must be an Australian resident and have lived in Australia for at least 10 years. Your income and assets must also be below certain limits. Read our article How much is the Age Pension in Australia? for more information.
In response to COVID, the Government temporarily reduced the minimum amount you needed to withdraw from retirement pension products.
As of 1 July 2023, the temporary reduction in drawdown rates ended, meaning those using a retirement income stream will be required to withdraw more of their super each year.
This table shows the temporary rates and the normal rates:
Normal percentage withdrawal rate
(From 1 July 2023)
Temporary percentage withdrawal rate
(2019–20 to 2022–23)
|65 to 74||5%||2.5%|
|75 to 79||6%||3%|
|80 to 84||7%||3.5%|
|85 to 89||9%||4.5%|
|90 to 94||11%||5.5%|
|95 or more||14%||7%|
Non-concessional contributions are extra super contributions you make using money that has already been taxed, such as your savings. Currently, you can contribute up to $110,000 per year in non-concessional contributions to super.
However, if you’re eligible, you can contribute more under the bring-forward rule. This rule allows you to contribute more than the annual non-concessional contributions cap by making up to three years of non-concessional contributions in a single income year.
One of the eligibility requirements for making non-concessional contribution is based on your total super balance. Your total super balance includes all amounts you have in the super system based on the previous 30 June.
In 2022-23, those who had more than $1.7 million in super previously could not make non-concessional contributions. With the cap now increased to $1.9 million, this may no longer be the case. Also, the thresholds to contribute more under the bring forward arrangement have increased which may allow more to be contributed to super. However, the rules are complex so it is worthwhile seeking financial advice.
On 30 June 2022, Susan’s total super balance was $1.75 million. As this was higher than the transfer cap of $1.7 million for 2022-23, she was not able to make any non-concessional contributions as her super balance exceeded the cap.
On 30 June 2023, Susan’s total super balance was $1.8 million. As this is below the increased cap of $1.9 million that applies in 2023-24, she can now make non-concessional contributions.
As one of the largest super providers in Australia,* we’re focused on delivering competitive returns, so your money continues to grow. When it comes to support, we go the extra mile— providing general super advice at no additional cost.
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This article has been prepared by NULIS Nominees (Australia) Limited ABN 80 008 515 633 AFSL 236465 (NULIS) as trustee of the MLC Super Fund ABN 70 732 426 024. NULIS is part of the Insignia Financial group of companies comprising Insignia Financial Ltd ABN 49 100 103 722 and its related bodies corporate (‘Insignia Financial Group’). The information in this article is current as at November 2023 and may be subject to change. This information may constitute general advice. The information in this article is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider obtaining independent advice before making any financial decisions based on this information. It is recommended that you consider the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) before you make any decisions about your superannuation. You can obtain the latest copy of the PDS (or other disclosure documents) and TMD by calling us on 132 652 or by searching for the applicable product at mlc.com.au. You should not rely on this article to determine your personal tax obligations. Please consult a registered tax agent for this purpose. Opinions constitute our judgement at the time of issue. The case study examples (if any) provided in this article have been included for illustrative purposes only and should not be relied upon for decision making. Subject to terms implied by law and which cannot be excluded, neither NULIS nor any member of the Insignia Financial Group accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in the information in this communication.