COVID-19 might put a spanner for the upcoming super guarantee increase, which is expected to increase on 1 July 2021 from 9.5% to 10%. Super guarantee is the minimum amount of earnings that the employer or self-employed has to contribute to one’s superannuation. This money is supposed to help fund retirement years and take off the pressure on the aged pension system.
Aussie baby boomers are aging and the burden of the age pension and other income support schemes for seniors will continue to increase. It has cost the federal budget over $15 billion this financial year and understandably, the government still pushes hard to increase the super guarantee to 12% by 2025.
However, the Keating government in 1992 intended to increase the super guarantee to 12% by 2001. However, the increase to the super guarantee have stalled because of changes in government. In last year’s election, the government delivered the increase to 12$ by 2025. The increase will come from the employer and employee’s pay packet so there will be less take home pay.
Because of the Coronavirus recession, the government has allowed early withdrawal from super. More than $34.8 billion has been withdrawn from super this year. The government may or may not continue to increase these plans because of the current economic environment but it is still important to make sure you live comfortably in retirement. We encourage you to contact our office to discuss how we can help you.
The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional.
We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.
As you look for different ways to grow and improve your business, seeking professional advice could prove to be an important and helpful decision.
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Ballarat Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia
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Sky Accountants Ballarat
Phone: 1300 328 855
Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia
Postal Address: PO Box 2234, Bakery Hill, Victoria 3354
Sky Accountants Gisborne & Macedon Ranges
Phone: 03 97444522
Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia
Postal Address: PO Box 270 Gisborne Victoria 3437