Federal Budget 2020

Here's a snapshot of what the Federal Budget 2020 means for your super and retirement.

What's changing?

This year’s Federal Budget focuses firmly on initiatives to create jobs for Australians and rebuild our economy, following the impacts of the COVID-19 pandemic.

The government has put forward several proposals aimed at making super work harder for members. AustralianSuper members can rest assured knowing they're already with the nation’s top performing super fund over 5 and 10 years*.

Here are the key changes to super and what they may mean for you. It’s important to remember that these changes will need to be legislated to come into effect.

  • The introduction of a new YourSuper comparison tool.
  • Super funds will be subject to an annual performance test.
  • Your super will follow you to your new job, also known as 'super stapling'.
  • Pensioners to receive two additional Economic Support Payments of $250.

YourSuper comparison tool

To help you compare the performance and fees of super funds and select the fund that is best suited to your needs, the Australian Tax Office (ATO) will introduce a new online super comparison tool called the YourSuper comparison tool. The tool will be introduced by 1 July 2021 and will:

  • Provide you with a table of super products ranked by fees and investment returns.
  • Link to fund websites.
  • Show all current super accounts and prompt you to consider consolidating accounts if you have more than one account.

The YourSuper comparison tool is expected to help you be better off in retirement by helping you to select a fund that performs well.

Annual performance test for super funds

To ensure that the retirement savings of members are protected from underperforming funds, by 1 July 2021, MySuper products will be subject to an annual performance test by the Australian Prudential Regulation Authority (APRA).

  • If a fund is identified as being underperforming, it will need to inform its members of its underperformance by 1 October 2021 and provide information on the YourSuper comparison tool.
  • Underperforming funds will be listed as underperforming on the YourSuper comparison tool until their performance improves.
  • Funds that fail two consecutive annual underperformance tests will not be permitted to accept new members. These funds will not be able to re-open to new members unless their performance improves.

Helping members to switch their super from an underperforming fund to a better performing fund could help boost retirement savings. For a typical young worker in their 20s, being in an underperforming fund during their working life could mean they may be up to $87,000 worse off at retirement. For someone in their 50s, it means they could be around $60,000 worse off at retirement.

Super to follow you to your new job (super stapling)

To help limit the number of duplicate super accounts held by employees, by 1 July 2021, new super accounts will no longer be created every time an employee moves jobs, an existing superannuation account will instead be ‘stapled’ to a member. The government has proposed the following measures:

  • If an employee does not nominate an account at the time they start a new job, employers will pay their super contributions to their existing fund.
  • Employers will access information about the employee’s existing super fund from the ATO.
  • The employer will do this by logging onto ATO online services and entering the employee’s details. Once an account has been selected, the employer will pay super contributions into the employee’s account.
  • If an employee does not have an existing super account and does not choose a fund, the employer will pay the employee’s super into their nominated default super fund.

Additional payments for Pensioners

Following on from the two $750 COVID-19 payments provided earlier this year, eligible recipients of certain government benefits, such as those on the Age Pension, will receive two extra $250 Economic Support Payments, one from November 2020 and one in March 2021.

Other key announcements

Personal tax cuts

To put more money in the pockets of Australians, the government announced the lowering of personal income taxes consistent with their 2018-19 plan. Stage 2 personal income tax cuts will now be brought forward 2 years from July 2022 to July 2020. In dollar terms, this means that lower and middle-income earners will get up to $2,745 back for singles and up to $5,490 for two income families, compared to 2017-18. Those earning $40,000 a year will pay 21% less tax this year compared to 2017-18 and those on $80,000 around 11% less.

The table below provides a summary of the income tax rates effective from 1 July 2020.

Rate (%) Current thresholds (from 1 July 2019)
Income range ($)
Thresholds from 1 July 2020 (Stage 1)
Income range ($)
Tax free 0-18,200 0-18,200
19 18,201 – 37,000 18,201 – 45,000
32.5 37,001 – 90,000 45,001 – 120,000
37 90,001 – 180,000 120,001 – 180,000
45 > 180,000 > 180,000

Source: Australian Institute of Superannuation Trustees (AIST).

The next stage of income tax cuts are expected to come into effect from 1 July 2024. These cuts are summarised in the table below.

Rate (%) Threshold from 1 July 2020
(Stage 1) ($)
Threshold from 2024
(Stage 2) ($)
0 0 – 18,200 0 – 18,200
19 18,201 – 45,000 18,201 – 45,000
30 N/A 45,001 – 200,000
32.5 45,001 – 120,000 N/A
37 120,001 – 180,000 N/A
45 >180,000 >200,000

Source: AIST.

Investment in infrastructure

In addition to the measures announced during the COVID-19 pandemic, the Treasurer has committed an additional $14 billion for new and accelerated infrastructure projects over the next four years to support an estimated 40,000 jobs during their construction.

Aged care

An increase of funding, including $1.6 billion for 23,000 additional home care packages and $400 million to improve the aged care system.

Benefits for business

This year’s Federal Budget includes initiatives for businesses to support employment and growth.

  • The fringe benefit tax will be removed for retraining and reskilling provided by employers for employees redeployed into a different role in the business.
  • Businesses with a turnover of less that $5 billion can write off the full value of eligible assets used on installed by 30 June 2022.
  • Companies with turnover of less than $5 billion can carry back losses incurred in the 2019-20 to 2021-22 years.

Next steps

mobile phone app
Get the app

Keep on top of your super with the AustralianSuper mobile app.

find out more
woman conducting a lecture
Attend a webinar

We run regular webinars that can help you make the most out of your retirement income.

find out more
mobile phone
Call us

If you need help planning for your future, call us on 1300 300 273 and we can put you in touch with a financial adviser^.

Find out more
Stay informed

Find out more about these and other changes at budget.gov.au

Find out more

*Based on the AustralianSuper Balanced investment option compared to the SuperRatings Fund Crediting Rate Survey – SR50 Balanced (60–76) Index, periods to 30 June 2020. Investment returns are not guaranteed. Past performance is not a reliable indicator of future returns.

Source: Treasury’s Your Future, Your Super fact sheet available here.

^The financial advice given to you will be provided under the Australian Financial Services Licence held by a third party and not by AustralianSuper Pty Ltd (AustralianSuper) and therefore is not the responsibility of AustralianSuper. With your approval a fee may be charged if a Statement of Advice is provided.

Back to top