Will the Superannuation Guarantee Rate of 9.5% remain on hold?
The Superannuation Guarantee (SG) Rate is the compulsory amount that an employer must pay into any eligible employee’s chosen super fund. Since July 2014, the rate has remained on hold at 9.5% without any further increases as initially planned when the scheme first came into place.
However, the ATO is due to incrementally increase the SG rate from 1 July 2021 until it would eventually reach 12% by 1 July 2025 as follows:
- 1 July 2021 - 10.00%
- 1 July 2022 - 10.50%
- 1 July 2023 - 11.00%
- 1 July 2024 - 11.50%
- 1 July 2025 - 12.00%
We will hear much discussion about SG rates in 2020.
The Government has maintained that the planned increases will proceed and they appear to have support from the Opposition who believe that this is a “practical reform that will benefit people’s lives.”
The Productivity Commission has an upcoming review into retirement incomes, which should address the increases to the Super Guarantee and could consider if the rates should remain the same, be delayed or scrapped all together. The outcome of this report will be closely watched.
Superannuation is expected to receive significant debate in the coming year and Your HRmanager will keep you informed of any updates. Should you have any queries, please contact our team.