Superannuation is constantly changing, and some of the changes can affect your super balance. We'll keep this guide up-to-date with the latest changes to super so you always know what's happening. Here is a summary of the changes so far:
Increase of super guarantee on 1 July 2023
Inactive super accounts closed
Inactive insurance cancelled
Cap on fees
Super stapling
Super for low-income earners
Increase to super contributions
Rules for underperforming funds
Changes to super guarantee rate
From 1st July 2023 super guarantee increased from 10.5% to 11%. This means employees will more contribution to a better retirement.
The super guarantee rate is gradually increasing over the next few years. The super guarantee is based on a percentage of your annual earnings.
Here's how the super guarantee rate has and will continue to change over the next couple of years.
Super guarantee change
Year
Super guarantee rate
1 July 2020
9.5% p.a.
1 July 2021
10% p.a.
1 July 2022
10.5% p.a.
1 July 2023
11% p.a.
1 July 2024
11.5% p.a.
1 July 2025
12% p.a.
Other latest changes to superannuation
The government has made several changes to superannuation over the past 2 years. Here are the latest changes to superannuation and how they'll impact you.
Inactive superannuation accounts closed
If your super account has less than $6,000 in it, and it hasn't received a contribution for 16 months, it'll be classified as an inactive account. If your super account is deemed to be inactive, the fund will be forced to send the remaining balance to the ATO and close the account.
From here, the ATO will track down your current super account and send the money there, so it's all in the same account.
This is a good thing, as it prevents you from paying ongoing fees on old super accounts that you may have forgotten about.
Inactive insurance cancelled
If your super account is inactive (if it hasn't received a contribution for 16 months), the fund will also need to cancel your insurance and stop charging you insurance fees. Again, this is to prevent you from paying fees on a forgotten account that you don't use.
Caps on fees
If your super balance is less than $6,000, there will also be an annual cap on the annual fees, so they can't be more than 3% of your account balance. This is to prevent your balance from being eroded by fees while you might not be working, earning a low income or taking time out of the workforce. This is the case even if you're still making contributions to your fund.
However, annual fees of 3% are still very high. Ideally, you should be looking for a super fund that has fees less than 1.5% of your account balance.
Super funds are also no longer allowed to charge you an exit fee if you want to leave the fund. You can change super funds at any time, with no fee to do so.
Super stapling
As of July 2021, your super fund is now "stapled" to you. This means your current primary super fund will come with you from job to job.
Previously, you could open a new super fund every time you started a new job (sometimes you might not have even noticed this was happening). This would result in many people having several super funds in their name – and several sets of fees to pay.
Now, when you start a new job, you will take your fund with you, unless you choose to switch funds. This is designed to prevent people from having multiple super funds.
Super for low income earners
As of 1 July 2022, people earning less than $450 a month from one employer are entitled to super payments. Previously your employer wasn't required to pay you any super if you earned less than $450 per month. This is good news for people who only work a few days or shifts each month.
Changes to super contributions
As if 1 July 2021 the amount that you can contribute into your super each year has recently changed. Previously, you could contribute $25,000 into your super each year as concessional contributions. This has been increased to $27,500 per year as of 1 July 2021.
Concessional super contributions are contributions you make before tax, including via salary sacrifice and your employer super contributions, and also contributions you make and claim a tax deduction for.
As of 1 July 2021, the amount you can contribute as a non-concessional contribution has also changed; it has increased from $100,000 per year to $110,000 per year. These are contributions that you don't claim a tax deduction for.
Changes to rules for underperforming super funds
Starting in July 2021, the industry regulator APRA announced it would be publicly naming and shaming the worst-performing super funds each year and encouraging members to switch.
APRA will look at the MySuper funds in the market and name the ones that have failed their performance benchmark. MySuper funds are the default products offered by funds that are the standard "no-frills" option for members and are where the majority of people have their super invested.
In 2021, the first year of this new legislation, APRA found that 13 MySuper funds failed to meet their benchmark and underperformed. You can see a list of the 13 worst-performing super funds for 2021 and check if yours is one of them.
In 2022 APRA found 5 funds failed to meet their benchmark and underperformed. Worryingly, 4 of these also failed in 2021!
Each year, these funds will be forced to write to all members and admit that they have failed their benchmark performance and direct members towards a link where they can compare super funds. If one of your funds is included, you'll be notified by your fund and given the opportunity to switch to a new fund.
Alison Banney is the money editorial manager at Finder. She covers all areas of personal finance, and her areas of expertise are superannuation, banking and saving. She has written about finance for 10 years, having previously worked at Westpac and written for several other major banks and super funds.
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