text size
  • -
  • =
  • text size
  • +

Federal Government delays move to 12% SGC rate

September 7th, 2014

The Federal Government has delayed the introduction of a 12% superannuation guarantee contribution (SCG) rate until 2025/26.

Under the previous government, the rate was set to reach 12% by 2019. However the Federal Government has changed the timeframe for increasing the rate, with the increase to 12% now delayed until 2025/26.

The delay was agreed in a deal with the Palmer United Party and some other crossbench Senators to repeal the mining tax. Under the deal the low income-earners super contribution (LISC) will also be abandoned on June 30, 2017.

The new SGC rate timetable is illustrated in the following Industry SuperFunds table:

Financial year

Rate
2014/15 9.5%
2015/16 9.5%
2016/17 9.5%
2017/18 9.5%
2018/19 9.5%
2019/20 9.5%
2020/21 9.5%
2021/22 10.0%
2022/23 10.5%
2023/24 11.0%
2024/25 11.5%
2025/26 12.0%

The delay in the introduction of the 12% rate is just one of a number of new requirements and reporting obligations on employers.

Others flagged by Industry SuperFunds and First Super include:

Removal of the low income contribution

Employers should also be aware the government has passed legislation to remove the low income super contribution scheme from 2017.

Currently, the government contributes up to $500 into the super accounts of Australian workers earning less than $37,000 a year under the scheme.

Upper age limit removed

From July 1, 2013, the maximum age that an employee is entitled to a superannuation guarantee contribution was removed.

This means that employers must continue to make super contributions for employees who are over 70 years of age.

MySuper default accounts

From January 1, 2014 all default fund payments made by employers must be paid into an authorised MySuper product.

All Industry SuperFunds including First Super have already been MySuper authorised, making it easy for employers to select an Industry SuperFund as their default fund.

For more information contact First Super on 1300 360 988.

This publication was issued by First Super Pty Ltd (ABN 42 053 498 472, AFSL 223988), as trustee of the First Super superannuation fund (ABN 56 286 625 181). The information is not investment advice and does not take your personal circumstances into consideration. You should consult the product disclosure statement (PDS) before making any decision. Content was accurate at the date of issue, but may subsequently change. You should contact First Super on 1300 360 988 for updated information and to obtain a copy of the PDS.