Preparing for the New Financial Year

From 1 July 2023 a number of key financial matters will be altered reflecting recent inflation and an end of COVID-19 relief policies.

Account Based Pensions – Changing Minimum Payment Amounts

What’s happening?

In 2020 as a COVID-19 relief measure the Federal Government temporarily reduced the minimum payment amount from superannuation account based pensions. This measure was then extended through FY21/22 and FY22/23. This temporary reduction in the minimum withdrawal requirements will end on 30 June and from 1 July the minimum required to be drawn from pension accounts will revert back to the original amounts. The account balance to calculate the amount due to be paid is based on account balances as at 30 June. Please see the table below for more specific figures.

How will this affect me?

• If you are currently drawing the minimum pension payment amount, you will see this payment increase as per the table above;

• If you are supplementing your income from superannuation pension payments with drawings from non-super investment accounts, it may be a good idea to review the levels of drawings. This will ensure you are only drawing what you need from that portfolio.

To Note

• The level you draw from superannuation pensions is not assessed by Centrelink and the increase in pension payments will not affect any age pension entitlement.

Indexation of Centrelink Asset Test Thresholds

Each quarter Centrelink revises its asset and income thresholds for a number of its benefits. More specifically as a result of recent inflation there will be a significant jump in the assets thresholds for age pension eligibility. The below table provides the upper asset limit to receive a part age pension (ie if you have an asset position under these thresholds you may be entitled to some age pension). I note that the asset thresholds outlined below exclude the value of your home as it is not assessed by Centrelink.

How will this affect me?

• Depending on your total asset position (excluding your home) you may now become eligible for a part age pension;

• The indexation applied to the upper asset threshold has also been applied to the asset thresholds for a full age pension. This means that if you are currently in receipt of a part age pension your payment may increase. This increase will happen automatically.

Super Guarantee rate to increase

The level of employer funded superannuation contributions will increase from a rate of 10.50% to 11% from 1 July.

First Home Buyers – Stamp Duty Exemptions

First home buyers purchasing a property to live in will pay no stamp duty for homes under $800,000 and concessional rates of stamp duty on homes valued between $800,000 - $1,000,000.

During our review of your financial and personal position we will assess whether the above items will have an impact on your situation.