In accordance with the Government’s announcement back in May last year, the level of Superannuation Guarantee contributions required to be paid by employers to employees will gradually increase from 9% to 12%.
In addition to rising the rate of compulsory superannuation, the Bill also proposes to raise the age limit from age 70 to age 75 so that compulsory contributions can be made for older employees.
These measures are intended to commence on 1 July 2013.
The following table indicates the schedule of increases each year, starting with a 0.25% increase on 1 July 2013 and reaching the 12% level by 1 July 2019:
|Year starting on 1 July 2013||9.25|
|Year starting on 1 July 2014||9.5|
|Year starting on 1 July 2015||10|
|Year starting on 1 July 2016||10.5|
|Year starting on 1 July 2017||11|
|Year starting on 1 July 2018||11.5|
|Year starting on or after 1 July 2019||12|
While there is broad support for the proposed changes, particularly from the superannuation industry, the likely cash burden for small and medium sized employers is still uncertain. While the increments are small and gradual, some employers may want to factor this into future wage negotiations with employees.
Either way, the proposed increase in superannuation being received by individuals in future should provide a greater incentive to more people to manage their superannuation.
For advice on superannuation, call us on 9411 5422..