Budget night has come and gone, and by now I am sure you have seen news article after news article on what was announced and what hasn’t been announced.

I have tried to keep this post very brief, and if you would like more information please give me a call.

Superannuation Pensions

There were very few announcements regarding superannuation, which most would accept as a good sign.  The only major announcement and impact in superannuation was the continuation of the 50% reduction in the legislated minimum draw downs of superannuation pension.

What this means is that if you are aged 65 – 74 your normal minimum pension payment amount of 5% of the value of your superannuation pension continues to be reduced to 2.5% for another 12 months.


Everything else that impacts superannuation was not announced in last night’s budget, but there are a couple of important changes that have been previously announced that start on July 1 2022.

  1. Increase in the Superannuation Guarantee Percentage
    On July 1 2022, the amount of superannuation that your employer must pay you increases to 10.5% (up from 10%).  This has been previously legislated and is part of the journey to 12% on July 1 2025. 
  2. Removal of the Work Test for Australians aged under 75
    A measure that was announced in the 2021 budget, and passed into law recently, the removal of the work test commenced on 1 July 2022.

    The removal of the work test allows Australians aged under 75 to make non-concessional contributions without having to meet the work test of 40 hours in a 30 day period.  This opens up a range of opportunities for those in this age bracket.  This includes saving your Estate substantial tax, as well as the ability to get additional funds into the zero-tax environment of superannuation pensions. 

  3. Extension of the Downsizer Contribution
    This was announced prior to the budget but still needs legislation to enable it.  The downsizer contribution allows those who sell an Australian property that they have lived in to make a contribution of up to $300,000 each into super.  Currently, you have to be over age 65 to do this, but it is proposed that the age be reduced to age 60.

Tax and Age Pension

Many taxation and age pension benefits were announced last night.  Some will be enacted immediately, but most will require the passing of legislation, and therefore need to pass through the Senate.  The Coalition Government does not have a majority in the Senate.  The key announcements that may impact you were:

  1. Reduction in Fuel Excise
    Effective immediately the fuel excise will be reduced from 44.2 cents per litre to 22.1 cents per litre.  Effective immediately won’t mean that you will necessarily see this reduction today, as your local petrol station has already paid the excise on the fuel in the tanks.  However, over the coming week or so, we should see an equivalent reduction in the price of fuel.  The reduction in excise will be removed in 6 months’ time. 
  2. Increase in the Low and Middle Income Tax Offset (LMITO)
    If you earn under $126,000 per annum you will benefit from the increase to the LMITO when you lodge your tax return for the current financial year (2021/22).  The increased offset in proposed to be $420.

    LMITO was always meant to be a temporary tax relief for COVID, and after having been extended a number of times is forecast to cease after the 2021/22 financial year. 

  3. Age Pension. One-off cost of living payment
    If you receive an age pension, a Commonwealth Seniors Health Care card holder, or a number of other benefits, you will receive a one-off cost of living payment of $250 in April.

More Information

This budget was fairly benign, with the Government having to juggle an upcoming election with a tight fiscal situation, and as a result, there were very few announcements.

If you would like further information you can go to: