Federal Budget 2018/2019 - BUSSQ

Federal Budget 2018/2019

The Federal Budget announcement on Tuesday 8 May included some proposed changes that may affect you. It is important to remember that all changes are proposed, unless stated otherwise.


While the changes to superannuation are not significant, they may be of interest to BUSSQ members.  We’re here to help you get your financial future sorted so please get in touch with us if you have any questions.

It is important to remember that all changes are proposed, unless stated otherwise.


Superannuation funds will be required to create a retirement income strategy for super fund members, and provide products that offer ‘income for life’. The industry term for these is Comprehensive Income Products for Retirement (CIPR’s).

These lifetime retirement income products will be subject to new means test rules which will apply to pooled income streams from 1 July 2019.

60% of the purchase price of the product will be assessed as assets until the age of 84 years, or a minimum of 5 years, and then 30% for the rest of the person’s life.

Also included in the budget is a range of measures intended to support older Australians. These measures include:

  • An increase in earnings cap for the Pensioner Work Bonus from $250 per fortnight to $300 per fortnight. The increased Pensioner Work Bonus will enable pensioners to earn up to a threshold amount—now $7,800 per year—without it affecting their pension. Only the portion of a pensioner’s earnings over that threshold will be counted towards the age pension income test.
  • Expansion of the Pensioner Work Bonus to allow self-employed retirees to earn up to $300 per fortnight without impacting their pension.
  • The Pensions Loans Scheme will be expanded to cover all Australians over Age Pension age, and to increase the maximum fortnightly income stream to 150% of the Age Pension rate. The Pensions Loan Scheme effectively provides a reverse mortgage, to enable individuals to use the equity in their homes to increase their incomes. 

    Currently this is available to people receiving part pensions, allowing them to top up their Age Pension to the maximum rate. It does not currently apply to age pensioners receiving the maximum rate of Age Pension, or self-funded retirees.


The government will introduce an exemption from the work test for voluntary contributions to superannuation, for people aged 65-74 with superannuation balances below $300,000, in the first year that they do not meet the work test requirements. Existing contribution cap rules will continue to apply to contributions made under the work test exemption.  This will apply from 1 July 2019.

The government will allow individuals who have multiple employers and income in excess of $263,157 to nominate that their wages from certain employers are not subject to the superannuation guarantee (SG) from 1 July 2018, to avoid breaching the concessional contributions cap.  It is anticipated that these employees would negotiate to receive additional income which would then be subject to marginal tax rates.

The ATO will also receive additional funding to ensure that everyone who claims a deduction on their personal superannuation contributions in their tax return, has also lodged the appropriate notice with their fund.

Tax rate changes

The Budget makes a number of changes to marginal tax rate brackets and tax offsets for low and middle income earners in three stages, as part of a ‘personal income tax plan’.  More information can be found here.

The increase to the Medicare Levy has not gone ahead.

Protecting your super

The budget contains a number of reforms with the aim of protecting your super.  There is a focus on preventing the erosion of small member balances.

Fee changes from 1 July 2019

  • Superannuation funds will no longer be allowed to charge exit fees to members who make withdrawals from their superannuation accounts or roll over their super to other funds.
  • There will also be a cap of 3% imposed on passive fees charged on superannuation accounts with balances under $6,000.  
  • Accounts with no activity within the past 13 months, and with balances under $6,000 will be sent to the ATO.  This will enable these accounts to be reunited with active super accounts belonging to the same person, and will prevent fees from eroding the balance in the meantime.

    You can use BUSSQ’s Super Search tool to find all your super and roll it into your BUSSQ account.  As exit fees still apply, you may want to check with your other fund what these will be, and also confirm if your other fund has any insurance cover you want to keep, before you roll in. You can call us to assist with this process on 1800 MY BUSSQ (1800 69 2877).

Insurance changes

From 1 July 2019, if you are under age 25, have a balance under $6,000, or your account has not received a contribution in 13 months, you will need to opt in to have insurance cover included in your super.  Members who fit into these categories will have 14 months to opt in to retain their insurance cover before it is automatically switched off.

BUSSQ is here to work with you to get your insurance and super sorted.  Call us on

1800 MY BUSSQ (1800 69 2877)

to find out what cover you currently have and how we can assist you further.

More information

Please remember that unless stated otherwise, changes announced in the Budget are proposed changes only until legislated. To speak to a Financial Planner about how these changes may affect you, call BUSSQ on 
1800 MY BUSSQ (1800 692 877)

To see the full Federal Budget, go to budget.gov.au.

The information supplied in this article is general advice only and does not take into account or consider your personal objectives, financial situation or needs. Before acting, you should review the relevant Product Disclosure Statements to ensure you have all the information about the BUSSQ relevant products and how they work and consider the appropriateness of the information to your needs or seek independent advice from a properly qualified professional.