Pension investors will benefit from carbon tax relief
Pension investors aged between 55 and 59 could save hundreds of dollars as part of the Government's proposed carbon tax relief package, according to National Australia Bank (NAB).
In a recent analysis by MLC Technical Services, they found that under the Clean Energy (Income Tax Rates Amendments) Bill 2011 pension investors are likely to receive an additional $1500 in taxable pension income, without paying any tax, from 1 July 2012. Then from 1 July 2015, they are likely to receive $2,000 in tax-free income when compared to the current year, MLC found.
Currently, a pension investor aged between 55 and 59 are eligible to receive taxable income payments of up to $48,158 before income tax is payable.
According to the analysis, if the bill is passed this figure will increase to $49,753 from 2012 and $50,189 from 1 July 2015.
"This is great news for pension investors in the 55 to 59 age group, including those who have started a transition to retirement pension," said MLC Technical Services head Gemma Dale.
"This means they can draw more income, if required, from their pension investment without paying any tax."
Dale said the carbon relief measures should result in a tax saving of around $280 in 2012 (if the legislation takes effect) and $360 in 2015, after taking into account the 15 per cent pension tax offset.
"This makes using super money to start a pension investment even more attractive, given you can also receive unlimited tax-free income payments at age 60 or over, as well as possible Centrelink income test concessions," Dale said.
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