In this guide
- Self-funded retirees to pay more under proposed Aged Care reforms
- Coalition amendment to paid parental leave rejected by industry
- Super funds need to do more for millennials
- Super CEOs urged to mind their conduct in private markets
- Unpaid super costs Australians over $5 billion a year
- Super assets grow by 9% in 2023-24
Self-funded retirees to pay more under proposed Aged Care reforms
Self-funded retirees will contribute more to their aged care needs – both at home and in residential care – under new aged care reforms announced by the Labor Government in response to recommendations by the Aged Care Taskforce.
The Government says the net impact of the changes is a $930 million spend over four years and a $12.6 billion save over the next 11 years.
Starting from 1 July 2025, the Hoteling Supplement – which funds the gap between the Basic Daily Fee for residential aged care and the actual cost of providing everyday living services in residential care – will be means tested.
Residents who have more than $238,000 in assets, more than $95,400 in income, or a combination of the two, will make additional contributions towards their everyday living costs.
The contribution will be calculated as 7.8% of assets over $238,000 or 50% of income over $95,400 (or a combination of both), up to a limit of the Hoteling Supplement ($12.55 per day, as at 20 September).
The Government has promised quicker access to the new Support at Home program and will target average wait times for services of three months from 1 July 2027.
Under the Support at Home program, there will be no personal contribution required for services in the clinical category (such as nursing and physiotherapy), however contributions will be required for services in the independence category (personal care) and everyday living services (such as domestic assistance and gardening). Independence service contributions will start at 5% for full pensioners ranging up to 50% for self-funded retirees, while contributions for services in the everyday living category will start at 17.5% for full pensioners, increasing to 80% for self-funded retirees.
Coalition amendment to paid parental leave rejected by industry
The Government has introduced the Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Bill 2024 into Parliament which will allow for the payment of super on Government-funded Paid Parental Leave.
Despite agreeing in principle to support this proposal, the Coalition is now seeking to amend the legislation to “introduce more flexibility”.
The Coalition is seeking amendments that would allow Australian parents eligible for government-funded paid parental leave to choose between receiving:
- Super contributions on government-funded paid parental leave, or
- An additional two weeks of government-funded paid parental leave, increasing leave to 26 weeks after 1 July 2025 and 28 weeks after 1 July 2026, or
- A one-off payment equal to the total value of the super entitlement for government-funded paid parental leave.
However, industry organisations like the Super Members Council (SMC) are urging the Coalition to reconsider.
“It undermines the policy intent to boost the retirement savings of Australian mums and to start to turn around the gender super gap – which has been widening for women in their 30s,” SMC chief executive officer Misha Schubert said.
“It sends a deeply concerning message to mums that they should sacrifice their future financial security to meet daily expenses…And it risks putting pressure on mums to raid their retirement savings or being forced to by coercively controlling partners.”
Super funds need to do more for millennials
Millennials might be the largest generation in the workforce but new research from the Australian Security and Investment Commission’s Moneysmart found that nearly half (48%) of surveyed millennials admit they are not knowledgeable about maximising their super.
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