With the arrival of 2025, there are numerous substantial adjustments and key changes ahead for 2025 that could potentially impact your retirement planning and superannuation strategy. It is beneficial to comprehend the precise implications of these modifications in your specific circumstances in order to maintain a competitive edge.

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. Example below:

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

Holders of certain legacy pensions which add certain restrictions (primarily those initiated prior to September 20, 2007) will have a maximum of five years from December 7, 2024, to convert their legacy retirement products to a more adaptable Account-Based Pension (ABP), accumulation account, or cash. This may provide retirees with older pension products with greater latitude and flexibility to modify their arrangements to accommodate their current requirements. The Hon Stephen Jones MP issued a statement that confirmed that “social security treatment will not be preserved for those who choose to transition out of their legacy retirement product.“

3. Government-funded parental leave

Superannuation will be paid on government-funded Parental Leave Pay starting on July 1, 2025, with contributions computed at 12% of the payment. After the fiscal year concludes, eligible parents will receive these contributions in a single payment, which will include interest.

Services Australia will continue to administer Parental Leave Pay applications, while the ATO will assume responsibility for superannuation disbursements commencing in July 2026. This modification is intended to increase the retirement earnings of parents and is a component 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.

Further ahead in 2026: Pending legislation

Payday Super

It is suggested that employers be required to pay superannuation in conjunction with compensation beginning on July 1, 2026. The ATO is currently in the process of developing the method by which this will be implemented. The objective of this forthcoming modification is to streamline the process and guarantee that superannuation is disbursed more promptly and timely. Although this measure is still in the process of being discussed and has not yet been enacted, it is a matter that should be monitored for its potential impact on your retirement savings and employer obligations.

Stay prepared for the changes ahead

These changes could have a significant effect on your retirement planning and superannuation. 

If you’re confused about how these proposed changes or recent legislation changes impact you and you need help updating your retirement plan, an initial discovery strategy session can guide you through them.

If you require assistance to understand your options or require guidance on strategies to assist you with your retirement planning, please don’t hesitate to reach out to our office on (02) 9188 1547 or email admin@rpwealthmanagement.com.au as we have office location in Oran Park and Baulkham Hills if you require an appointment.

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