FPA calls for tax rebates on low-income super contributions

The Financial Planning Association (FPA) is calling for the implementation of tax rebates on super contributions for low-income earners, as well a two-tiered age pension system

In a submission to the Federal Government’s Tax Review Panel, the FPA argues that key policy changes are needed to ensure Australian retirees are adequately catered for in all phases of retirement.

Chief executive Jo-Anne Bloch described the FPA’s recommendations as “integral to the sustainability of Australia’s retirement income system".

They would “help deliver a robust system for retirees and ensure that Australians achieve a comfortable retirement based on a system that is fair, flexible, accessible and sustainable".

“Meeting this challenge requires fundamental consideration of the hurdles to be overcome and innovative thinking on how retirees’ needs can be met,” she said.

Apart from the tax rebate on superannuation contributions, the key policy changes the FPA is recommending include:

- the introduction of a two-tiered age pension system that would see an age pension for people 65-79 and an old age pension for those 80 years and over;

- a deferral mechanism for the age pension to replace the Pension Bonus Scheme based on an agreed criteria;

- incentives to encourage a savings culture, workforce participation and deferral of the age pension; and

- an increase in the superannuation guarantee and expanded access for all Australians using ‘soft compulsion’.