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All Things Budget 2022

Welcome to our latest newsletter, Budget Edition, in which we consider the main items in the budget handed down on 29 March 2022 that may impact our super clients.

Extension of the temporary reduction in super minimum draw down rates

The Government has extended the 50% reduction of the superannuation minimum drawdown requirements for account-based pensions and similar products for a further year to 30 June 2023. The minimum drawdown requirements determine the minimum amount of a pension that a retiree must draw from their superannuation to qualify for tax concessions.

Given ongoing volatility, this change will allow retirees to avoid selling assets to satisfy the minimum drawdown requirements.

Based on this change, the effective reduced minimum percentage factors for account-based pensions (‘ABPs’) (including Transition to Retirement Income Streams (‘TRISs’)), are set out in the following table for the 2023 income year.

Note that, for ABPs and TRISs that commence or cease part-way through the 2023 income year, a pro-rated minimum pension payment applies (unless the pension commenced on or after 1 June 2023, in which case, no minimum pension payment is required).

Recipient’s ageMinimum percentage factor  Reduced minimum percentage factor
Under 654%2%
65 to 745%2.5%
75 to 796%3%
80 to 847%3.5%
85 to 899%4.5%
90 to 9411%5.5%
95 and above14%7%

Cost of living payment

This consists of a $250 economic support payment to help eligible recipients with higher cost of living pressures. The payment will be made in April 2022 to eligible recipients that receive payments

such as the age pension, the disability support pension, the Eligible Veterans’ Affairs payment, or that hold a concessional card such as the Pensioner Concession Card (PCC), the Commonwealth Seniors Health Card, or the Veteran Gold card (note that this is not an exhaustive list).

Increase to low and middle income tax offset (‘LMITO’)

The Government has announced a one-off $420 cost of living tax offset for the 2022 income year for those with income under $126,000, which will be provided in the form of an increase to the existing LMITO. This will increase the maximum LMITO benefit to $1,500 for individuals and $3,000 for couples and will be paid from 1 July 2022 when Australians submit their tax returns for the 2022 income year.

Temporary reduction in fuel excise

Higher fuel prices will be temporarily reduced by halving the excise rate that applies to petrol and diesel for six months. The current rate of excise is 44.2 cents per litre and will reduce to 22.1 cents per litre under this measure, which is to commence from 12.01am on 30 March 2022.

As always, don’t hesitate to contact one of the friendly Greenlight Super Services team members if you require further assistance on (02) 6273 1066 or info@glss.com.au.

This newsletter is for general information only. Every effort has been made to ensure that it is accurate, however it is not intended to be a complete description of the matters described. The newsletter has been prepared without taking in to account any personal objectives, financial situation or needs. The information contained is correct as of 31 March 2022

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