Federal Budget 2023-24

This year’s Federal Budget was all about addressing the cost-of-living challenges in the face of ongoing geopolitical and market uncertainty. This includes:

• delivering cost-of-living relief
• strengthening Medicare
• investing in a stronger and more secure economy
• broadening opportunity

• strengthening our nation’s finances and funding priorities

Super changes

While there were no surprise super announcements, the Government has introduced a suite of changes that may affect how often you’re paid super and how your super is taxed. They also flagged several new measures to help reduce super underpayment and initiatives to better detect and recover unpaid super. 

Payday super coming in 2026

From 1 July 2026, employers will need to pay employees’ super at the same time as wages. Currently, employers must pay the Super Guarantee at least quarterly. While most employers do the right thing, the ATO estimates $3.4 billion worth of super went unpaid in 2019–20.

Payday super will make it easier for workers to track their super payments and ensure they’re not missing out on super they’re entitled to. This change will particularly benefit those in lower-paid, casual and insecure work who are more likely to miss out when super is paid less frequently.

For employers, more frequent super payments will make payroll management smoother, with fewer super liabilities sitting on the books. The proposed 2026 start date will give employers, super funds, payroll providers and other parts of the super system enough time to prepare for the change. 

Impact on members: Your employer must pay your super at the same time they pay your wages. According to the ISA, affected workers could be $50,000 better off at retirement.

Impact on employers: You must align super payments to employee paydays.

Proposed start date: 1 July 2026

Tax concession changes (for super balances above $3m)

From 2025-26, the concessional tax rate applied to future earnings on balances above $3 million will be 30 per cent. 

This means anyone with total super balances over $3 million at the end of a financial year will pay an additional tax of 15 per cent on the earnings on any balance that exceeds the $3 million threshold. 

This tax is in addition to any tax super funds pay on earnings in accumulation. 

Interests in defined benefit schemes will be appropriately valued and will have earnings taxed under this measure in a similar way to other interests.

Impact on members: If you have a super balance over $3 million, you will pay more tax. This is expected to apply to around 80,000 people in Australia.

Start date: 1 July 2025 

End of reduced minimum pension drawdown rate

On 1 July 2023, the minimum account-based pension drawdown rates will revert to pre-COVID levels. 

The minimum drawdown rate sets the minimum amount pensioners must draw from their super each year. 

In 2021, the Government temporarily reduced the rate by 50% as part of its COVID-19 economic response.

Impact on pension members: The minimum amount you must draw down from your pension each financial year will revert to the standard minimum amounts on 1 July 2023. Your exact draw down rate depends on your age. For details, read our Pension guide. 

Start date: 1 July 2023 

Increased funding for ATO compliance for underpayment of super

The Government will provide $40.2 million to the ATO in 2023–24 to improve unpaid super recovery rates. This consists of the following:

• $27.0 million to improve data matching capabilities to identify and act on cases of SG underpayment by employers
• $13.2 million for consultation and co-design

The Government has also set new targets for the ATO to increase the detection of SG underpayments, raise debts, and return recovered super to members.

Impact on members: The ATO will be able to detect and recover super underpayments more quickly and efficiently. These changes are projected to put an extra $380 million in member accounts before the start of payday super.

Improving engagement with taxpayers

The ATO will receive additional funding to help them engage more effectively with businesses to address the growth of tax and superannuation liabilities. This funding will happen over four years from 1 July 2023.

The additional funding is aimed at facilitating engagement with:

• taxpayers who have high-value debts over $100,000 
• aged debts older than two years where those taxpayers are either public and multinational groups with an aggregated turnover of greater than $10 million or privately owned groups or individuals controlling over $5 million of net wealth

Impact on members: The Government estimates these measures will result in $12.3 million in outstanding unpaid super.

Start date: 1 July 2023 (over 4 years)

More budget information

Can’t get enough budget info? For a full budget breakdown, visit budget.gov.au