Major tax change for wealthy Aussies
Aussies with more than $3 million in their super accounts will pay double the amount of tax, the government has announced.
Aussies with more than $3 million in their superannuation accounts will be taxed at a higher rate, in a major move by the federal government.
From July 1, 2025, the concessional tax rate will increase from 15 per cent to 30 per cent for about 80,000 people with balances above $3 million.
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Who will be affected?
According to the government, the change will only impact 0.5 per cent of Aussies. The majority of the population will continue to have their super earnings taxed at 15 per cent during the accumulation phase.
“This proposal does not change the fundamentals of our superannuation system,” Prime Minister Anthony Albanese said.
“99.5 per cent of people with superannuation are unaffected by this reform. Under 80,000 will be impacted by this.”
When do the changes start?
The changes will kick in from July 1, 2025 which will be after the next federal election.
It will apply to future earnings and will not be retrospective.
Why are the rules changing?
Treasurer Jim Chalmers said the changes were about making superannuation more "sustainable and fairer".
According to the Prime Minister there were 17 people with more than $100 million in their superannuation accounts, while one individual had more than $400 million. In contrast, the average Aussie has a balance of about $150,000.
“Most Australians would agree that is not what superannuation was for. It’s for people’s retirement incomes,” Albanese said.
“Confronted with this information, it will be irresponsible to not take any action whatsoever. That’s why we’ve made this decision today.”
The announcement comes after a tax expenditure report found tax breaks were costing the budget $50 billion a year. The new change is expected to generate revenue of about $2 billion in its first full year.
Industry super fund HESTA has welcomed the announcement, but said more needed to be done to deliver a “fairer and more equitable super system”.
“We’re calling on the Government to prioritise paying super on the Commonwealth Parental Leave Pay scheme and other important equity measures that will help finally close the gender super gap that sees women retire with, on average, about a third less super than their male counterparts,” HESTA CEO Debby Blakey said.
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