Legislation has been drafted to increase the Superannuation Guarantee (compulsory employer contributions) from 9% to 12% of an employee’s earnings.
If passed, the legislation plans a gradual increase in the SG rates from 2013. The Federal Government has also proposed increasing the upper age threshold of compulsory SG contributions (currently 70) so that super will be payable for older workers who choose to continue working.
For many Australians, this increase will be a welcome increase in their super savings. Related research by the ASFA in August 2011 shows the increase SG will positively impact real GDP levels and add $5463million to our economy by 2025.
We are monitoring the progress of this legislation but have raised concerns with our industry lobby groups for higher income earners who may already be subject to additional tax because of excess concessional contributions. Unless the contribution thresholds are increased in line with the SG rate, we suspect a small number of AvSuper members will have to pay more tax on their super. We will keep you informed as the legislation progresses.