Super changes from 1 July 2023

There’s been a series of super changes in recent months. Here’s a brief outline of key changes and what they could mean for you.

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Key takeaways:

  • On 1 July 2023, the compulsory super paid by your employer went up from 10.5% to 11% of your income
  • The maximum amount you can move from super into a tax-free retirement pension product has increased from $1.7 million to $1.9 million
  • The minimum amount you are required to withdraw from a pension account will double from 1 July 2023, with the temporary halving of rates ending.

There’s been a series of super changes in recent months. Here’s a brief outline of key changes and what they could mean for you.

Compulsory super contributions

On 1 July 2023, the compulsory super paid by your employer went up from 10.5% to 11% of your income. That 11% is scheduled to increase by half a percent each year till we hit 12% in 2025.

The intention behind this measure is to see a greater proportion of retirees relying less on the Age Pension and more on their retirement savings.

The super transfer limit has increased

Until 1 July this year, the maximum amount you could move from super into tax-free retirement super income streams, such as Account-Based-Pensions and Annuities, was $1.7 million (called the ‘transfer balance cap’). Because of indexation, that has now been increased to $1.9 million.

If you had a tax-free retirement pension before 1 July 2023, your cap may only be partially increased and the ATO will calculate your personal transfer balance cap. If you think you may be impacted, speak with the ATO or your accountant. You can also check your personal transfer balance cap via your myGov account.

Increase to Age Pension age

Australians born on or after 1957 will have to wait until they’re 67 years old—up from 66 years and six months—before they can apply for the Age Pension.

This increase also applies to the Commonwealth Seniors Healthcare Card.

In addition to your age, to receive the Age Pension you must be an Australian resident and have lived in Australia for at least 10 years. Your income and assets must also be below certain limits.

Changes to minimum withdrawals from pension products

In response to COVID, the Government temporarily reduced the minimum amount you needed to withdraw from retirement pension products.

As of 1 July 2023, the temporary reduction in drawdown rates ended, meaning those using a retirement income stream will be required to withdraw more of their super each year.

This table shows the temporary rates and the normal rates:

Age Normal percentage withdrawal rate (From 1 July 2023) Temporary percentage withdrawal rate (2019–20 to 2022–23)
Under 65 4% 2%
65 to 74 5% 2.5%
75 to 79 6% 3%
80 to 84 7% 3.5%
85 to 89 9% 4.5%
90 to 94 11% 5.5%
95 or more 14% 7%


Non-concessional contributions more accessible

What are non-concessional contributions?

Non-concessional contributions are extra super contributions you make using money that has already been taxed, such as your savings. Currently, you can contribute up to $110,000 per year in non-concessional contributions to super.

However, if you’re eligible, you can contribute more under the bring-forward rule. This rule allows you to contribute more than the annual non-concessional contributions cap by making up to three years of non-concessional contributions in a single income year.

Changes from 1 July 2023

One of the eligibility requirements for making non-concessional contribution is based on your total super balance. Your total super balance includes all amounts you have in the super system based on the previous 30 June.

In 2022-23, those who had more than $1.7 million in super previously could not make non-concessional contributions. With the cap now increased to $1.9 million, this may no longer be the case. Also, the thresholds to contribute more under the bring forward arrangement have increased which may allow more to be contributed to super. However, the rules are complex so it is worthwhile seeking financial advice.

Case study example

On 30 June 2022, Susan’s total super balance was $1.75 million. As this was higher than the transfer cap of $1.7 million for 2022-23, she was not able to make any non-concessional contributions as her super balance exceeded the cap.

On 30 June 2023, Susan’s total super balance was $1.8 million. As this is below the increased cap of $1.9 million that applies in 2023-24, she can now make non-concessional contributions.


Important information: This document has been prepared by IOOF Investment Management Limited (IIML) ABN 53 006 695 021, AFS Licence No. 230524 as Trustee of the IOOF Portfolio Service Superannuation Fund ABN 70 815 369 818 (Fund). IOOF Employer Super is a Division of the Fund. IIML is part of the Insignia Financial of companies, consisting of Insignia Financial Ltd ABN 49 100 103 722 and its related bodies corporate. This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from a financial adviser and seek tax advice from a registered tax agent. Please obtain and consider the PDS and the Target Market Determination (TMD) both of which are available for consumers to better understand products before making any decision about whether to acquire a financial product. Information is current at the date of issue and may change.