Low-income super break proposal
The Association of Superannuation Funds of Australia (ASFA) has welcomed a proposal contained in a Treasury discussion paper to give low-income workers a tax rebate on their superannuation contributions.
The measure, proposed to come into effect from 1 July 2012, would see the 15 per cent tax on contributions redirected directly into the super accounts of low-income workers.
Commenting on the proposal, ASFA chief executive Pauline Vamos (pictured) said her organisation had been advocating for such a rebate for several years.
“We specifically suggested such a measure in 2010 prior to it being adopted as part of the response to the Henry Review,” she said.
Vamos pointed out that people earning up to $37,000 currently did not receive a tax benefit from their superannuation contributions because their income tax rate was at or below 15 per cent.
“The plan to redirect the 15 per cent tax on contributions directly into the superannuation accounts of lower income earners means their accounts will accrue more savings, earlier, subject to compound interest,” she said.
Vamos said it had been estimated the measure would beneficially impact 3.5 million Australians, with the majority of recipients being women in part-time and casual jobs.
She said ASFA would be making a submission to Treasury in regard to the proposed mechanism for assessing and paying the rebate, but envisaged few problems with implementation because the method proposed built on that already in place for the co-contribution regime.
AUTHOR
Mike Taylor
Recommended for you
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
