As 2025 arrives, there are several significant changes coming that could affect your retirement planning and superannuation strategy. Understanding exactly what these changes mean in your particular situation helps you stay ahead.
1. Super Guarantee rate increases to 12% (starting 1 July 2025)
The Super Guarantee (SG) rate will increase to 12% on 1 July 2025, meaning employers will contribute more to your superannuation. This change will increase your retirement savings, especially if you are still working or nearing retirement.
Before (11.5% SG Rate): Annual salary of $60,000, with employer’s super contribution of $6,900 (11.5% of $60,000) per annum.
After (12% SG Rate): Annual salary of $60,000, with employer’s super contribution of $7,200 (12% of $60,000) per annum.
The increase of 0.5% will add an extra $300 to the superannuation contribution annually.
2. Legacy Pensions: New flexibility for older income streams
From 7 December 2024, holders of legacy pensions (those started before 20 September 2007) will have five years to commute their pension to a more flexible Account-Based pension (ABP), accumulation account, or cash. This will give retirees with older pension products more flexibility to adjust their arrangements to meet current needs.
3. Government-funded parental leave
From 1 July 2025, superannuation will be paid on government-funded Parental Leave Pay, with contributions calculated at 12% of the payment. Eligible parents will receive these contributions as a lump sum, including interest, after the financial year ends.
Applications for Parental Leave Pay will remain with Services Australia, while the ATO will manage super payments starting July 2026. This change aims to boost retirement savings for parents and is part of the government’s Working for Women strategy.
Proposed changes for 2025: Not yet law
The ATO’s roadmap for better targeted superannuation concessions outlines key upcoming reforms including:
1. Reduction on tax concessions for super balances over $3 million.
From 1 July 2025, the government proposes a 30% concession tax rate to be applied to future earnings for super balances over $3 million. If you have a super balance over this amount, it’s important to assess how this tax may affect your long-term retirement plans.
2. Super funds to report additional data to the ATO
It’s proposed that starting in July 2025, super funds will begin reporting additional data to the ATO to help assess your potential liability for the 30% tax on super balances over $3 million. It’s important to keep track of your superannuation balance and be aware of how this data might affect your tax obligations.
Learn more about the proposed changes.
Further ahead in 2026: Pending legislation
Payday Super
It’s proposed that employers must pay super at the same time as salaries from 1 July 2026. The ATO is continuing to design how this will be delivered. This future change aims to simplify the process and ensure super is paid more promptly. While this measure is still under discussion and not yet law, it’s one to keep an eye on for potential impacts on your retirement savings.
Stay prepared for the changes ahead
These changes could have a significant effect on your retirement planning and superannuation.
Retirement Essentials advisers love to help members make their plans, as well as review them when changes come along. Often simple changes can improve your retirement and provide you with greater confidence and peace of mind.
Make sure you’re informed about the new regulations and how they apply to your specific situation. If you’re unsure about how these changes affect you or need help adjusting your retirement plan, a strategy consultation can help you navigate these developments.
Are you already making a list of financial resolutions for the year?
