2010 Budget – much ado about nothing

Despite all the rumour and hype, Wayne Swan’s third Federal Budget was definitely not an exciting affair.

Very few real changes for superannuation were announced, other than confirming the proposals previously released as part of the Federal Government’s response to the Henry Review of Australia’s Future Tax System.

Budget proposals that may affect UniSuper members

In addition to confirming changes announced in the Government’s response to the Henry review, the 2010 Budget contained several (relatively) minor proposals for superannuation.

Superannuation co-contribution scheme reduction

In last year’s Budget, the Government reduced the matching rate for superannuation co-contributions to 100% and the maximum Government superannuation co-contribution to $1,000.

Co-contributions are additional contributions that the Government makes to the superannuation accounts of eligible lower income workers who make after-tax contributions.
Last year, the Government indicated that the reduction was temporary. However, the matching rate of 100% and the maximum superannuation co-contribution of $1,000 will be retained permanently.
The co-contribution eligibility income thresholds will be frozen for the next two years at their present levels of $31,920 (in order to receive the full co-contribution of $1,000), phasing out completely at $61,920.

Concessional and non-concessional contribution caps

There were no immediate changes announced to these contribution caps. Please note, however, the Federal Government’s initial response to the Henry Tax Report into Australia future tax system (released on 2 May 2010) did contain a proposal for higher concessional contribution caps for targeted groups, which was confirmed in the Budget.

For more information on the Government’s response to the Henry review, please see the UniSuper News article, Super windfall from Henry review.