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Survey on potential superannuation changes in Budget 2016

Changes are expected in the superannuation rules in the Federal Budget 2016. Here we list a ‘Deficit Dozen’ of potential amendments.

Please take our simple survey on what you would change (not what you think will change). It will only take a minute or so.

We will publish the first results on Sunday 1 May 2016, two days before the Budget.

The survey is now closed.

The potential changes are:

  • Extra 15% tax on concessional contributions ('Division 293 tax') for those earning $300,000 reduced to $180,000 or $250,000.
  • Annual cap on concessional contributions (before tax) reduced to $20,000 (or similar).
  • Annual cap on non-concessional contributions (after tax) reduced to $120,000 (or similar).
  • Abolish 'bring forward' rule which allows up to three years of non-concessional contributions in one go.
  • Introduce a tax on earnings for super in pension phase for people over 60.
  • Introduce a tax on pension payments for people over 60.
  • Introduce lifetime caps on concessional (before tax) contributions.
  • Introduce lifetime caps on non-concessional (after tax) contributions.
  • Abolish Transition-to-Retirement arrangements (but not retrospectively).
  • Remove current concession on capital gains tax for assets held in superannuation longer than 12 months.
  • Retain the low-income super contribution (LISC) scheme which is due to be scrapped on 1 July 2017.
  • Declare a freeze on any more changes to superannuation rules for at least the next three years.

Are there any other superannuation changes you think may be or should be introduced?

 

15 Comments
Stephen Huppert
May 01, 2016

Yes - it is interesting to see what people think about the budget, and the budget is important. I look forward to the results but not as much as I look forward to government and superannuation industry really putting the consumer first.

Graham Hand
April 29, 2016

Hi Stephen, you're correct this survey will have no impact on the Budget, but the fact that over 600 people have responded shows Cuffelinks' readers have an opinion and they want to express it. The comments provide a great insight into what people think about superannuation and possible changes. We will publish the results plus all the comments on Sunday and again in next week's newsletter. Cheers

Stephen Huppert
April 29, 2016

Why are we spending time and energy on the 2016 Budget? Your survey is unlikely to change what the Government is going to do.

We should be spending all this time and energy on the real issue: the fact that Australians are having to deal with the risks of retirement with very little assistance from the industry that should be doing just that - the superannuation industry.

Michael
April 29, 2016

Can anybody raise the issue of same superannuation rules applying to both politicians and common people at this coming election. Any party who promises to change the superannuation rules to politicians will get my vote (and a great majority of votes, I guess).
Wow! Am I just a dreamer to expect politicians to act honestly when it comes to their remuneration and perks?

Stanley
April 28, 2016

More lazy ill-conceived ideas are coming.

So you think you are safe because of fumbling politicians asserting 'no changes being applied retrospectively'?

With the last changes to old age pension rules, my then 77 yo sibling on part old age pension could only preserve the old asset test rules provided the super funded pension was never stopped and re-started after 31 December 2014. Effectively this change killed the concept of choice in superannuation provider, locking super provider arrangements as at 31 December 2014 unless willing to suffer the new asset test. Yes says the government, you can still exercise choice in super and escape the expensive for profit superannuation provider, but we will permanently penalise you for doing so.

The same advisers and public servants who delivered that outcome will be looking for you in the May 2016 budget.

Meanwhile…

What is a reasonable after tax income in retirement, measured as a percentage of after tax income before retirement?

Without access to the health benefits card, how much additional after tax income from super/investments is required to cover the additional health costs?

How does a woman take time out of the paid workforce to raise the next generation of taxpayers and still achieve a reasonable retirement income from superannuation? The blunt rules for additionally taxing incomes over some arbitrary amount does not respect women with low superannuation balances that in later life are still trying to match the males.

Janifer Eales
April 28, 2016

Leave super alone. The tax benefits are the carrot required to persuade people to put their life savings into something they cannot touch for 50 years that is subject not only to market forces but the whim of the political ruling class for all those years. Successive govts have suckered working people into believing they need super as they individually don't have the discipline, desire or brains to save and invest for their lifetime in other financial structures not so tied to political will.

John
April 28, 2016

Agree with Sharon. Sick of parasitic politicians and public servants, with overly generous superannuation and other benefits provided at public expense, seeking to punish working Australians trying to provide their own retirement monies.

Errol Davey
April 28, 2016

"Parasitic politicians and public servants"sums up the feeling of 80%of the general public.--Why should their superannuation entitlements be any greater than any other Australians.We should be all in the one boat!

Richard
April 28, 2016

Seems to me that the politicians who change the super rules should also obey and use the same super rules as the public.

Also, seems to me that the politicians should be able to set the rules and leave them alone. Are they so incompetant that they have to keep changing the rules?

JP
April 28, 2016

No wonder the black economy exists. Politicians from any party just can't be trusted.

sharon
April 28, 2016

There is no certainty i...and we need to be able to plan ahead...I have had to budget and live within my means...Governments want to get their hands on super and I don't agree with any cuts excep to the Polly Pension and the extras...try that for a start

Graham Hand
April 28, 2016

Thanks for the great response already. Results and all comments published on Sunday night.

Rob
April 28, 2016

Bring back the Reasonable Benefits Limit (RBL). Tax payers should not be underwriting tax-sheltered luxury retirement or inheritance schemes

Gary M
April 28, 2016

Add item 13: “tax-free (tax-payer funded) super fund income for life, tax-free (tax-payer funded) distributions for life, free (tax-payer funded) public transport for life, free (tax-payer funded) healthcare and medicines for life, free (tax-payer funded) utilities for life, plus a free slave for life.

Chris P.
April 29, 2016

To Gary M. I'll be the slave as long as I can play tennis at your place!

 

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