Client Alert

Superannuation changes from 1 July 2023

By:
Minny Talasch

A new financial year brings superannuation changes, and with it comes opportunities to strategise how you can increase your retirement wealth. We summarised the superannuation changes that you should be aware of from 1 July 2023.

Total Super Balance (TSB) Cap increased from $1.7m to $1.9m

The TSB determines eligibility to make non-concessional contributions in any given year for individuals up to the age of 75. With changes to the work test, there is now an opportunity for individuals with balances less than $1.9m to contribute further to their superannuation fund.

Transfer Balance Cap (TBC) increased from $1.7m to $1.9m

The TBC is a lifetime limit on the total amount of super that can be transferred into tax-free retirement phase income streams. An individual that has an amount in retirement phase, also has a transfer balance account. Where an individual has utilised the full transfer balance amount in prior years, they are not entitled to the indexation increase, but if you haven’t entered retirement phase, this is an opportunity.

Super Guarantee has increased from 10.5 per cent to 11 per cent

Please ensure that your employer is now paying the correct amount of Super Guarantee. A timely reminder to check any salary sacrifice arrangements in place have factored in the increase. Excess contributions mean extra tax.

Changes to Transfer Balance Account reporting requirements

All transfer balance events (such as pension commencements) are required to be reported to the ATO on a quarterly basis from 1 July. If you are thinking of commencing a pension, please let us know as soon as possible.

Related Party LRBA safe harbour Interest rate has increased to 8.85 per cent for Real Property and 10.85 per cent for Listed Shares.

The ATO has updated the interest rates for SMSF’s that have entered a related party Limited Recourse Borrowing Arrangement for Property or Listed Shares. The new interest rates apply for the 2023-24 financial year.

Minimum pension withdrawals are back to normal levels

Pension withdrawals are returning to pre-pandemic levels. Please keep this in mind for the year ahead, where possible, it might be required to revisit any reoccurring pension amounts that have been setup in prior years. 

Age 2023-24 onwards
Under 65 4 per cent
65-74 5 per cent
75-79 6 per cent
80-84 7 per cent
85-89 9 per cent
90-94 11 per cent
95 or more 14 per cent

 

You can reach out for help

Should any of the above changes impact your Superannuation Fund, or if you’re interested in discussing strategies, please don’t hesitate to contact us for a meeting. 

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