Government Retirement Income Review

Discussion in 'Superannuation, SMSF & Personal Insurance' started by ChrisP73, 28th Sep, 2019.

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  1. ChrisP73

    ChrisP73 Well-Known Member

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    Here we go again ....

    Retirement income review to tackle super 'sacred cows'

    The Morrison government has unveiled a sweeping review of retirement income that will tackle the politically sensitive "sacred cows" of the superannuation guarantee, the age pension and home ownership.

    The wide-ranging inquiry will explore the super tax concessions, means testing for the age pension, income and intergenerational equity and the cost to the federal budget.
     
  2. bumskins

    bumskins Well-Known Member

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    A review is something you do when you want to do nothing.

    How many reviews have there been on the topic? Why would another be needed?

    I wouldn't be concerned.
     
  3. balwoges

    balwoges Well-Known Member

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    I'm concerned ... conclusions will be reached, publicized and we will be given time to digest and get used to new ideas :eek:
     
  4. wombat777

    wombat777 Well-Known Member

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    I’m keen to use this as an opportunity to have my say, under the general topic of the power of the superannuation industry.

    I have direct share investments in my super. In-specie transfers to other superannuation funds not allowed. Obviously hobbles competition on fees and flexibility of the product. That’s my #1 gripe.

    #2 gripe is opening up the performance data so that independent 3rd party tools can be used ( with my permission ) to analyse performance.
     
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  5. ChrisP73

    ChrisP73 Well-Known Member

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    Good gripes.

    Looks like the whole thing is just a cover to reneg on the legislated increase in super guarantee rate though. Maybe I'll be pleasantly surprised.
     
  6. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I would be worried about the triple dip benefits of a person who is self funded at age 60+. Its only a matter of time before something is done to limit / moderate this.
     
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  7. SatayKing

    SatayKing Well-Known Member

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    May as well throw my "gripe" into the mix

    Bummer. I should have clarified where super is all in accumulation phase and no account-based pension is received.
     
    Last edited: 30th Sep, 2019
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  8. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I have long questioned the simplicity of a exempt super pension being a element of adjusted taxable income and this could be used to set a range of tests for things like access to refundable franking credits and a Centrelink benefit. Its what happens to those under aged 60 so why not ? But until something is done to limit pension wastage its not balanced and easily avoided. There are merits and concerns with forcing limits on super withdrawals. These sorts of issues are part of the review for sure.

    I guess the question is do we want a NZ based system where the age pension is a sure thing funded by working taxpayers that has some tests (remember NZ dont really have a super system) or a situation where its a safety net and works alongside super which reflects retirement savings.

    The apparent different treatment between super and property investment is a major shortcoming too. Self funded retiree/s with $1m each in property can be smashed with tax and super laws dont allow them do do a thing in most cases. I believe a self funded retiree should be allowed to rollover property investment to a smsf (subject to limits ie a cap) however this could expose some major liquidity traps when paying pensions... Perhaps the trap is that it can then be pension element of the fund ? Perhaps given the same CGT rollover rules as a small business ??
     
    Last edited: 30th Sep, 2019
  9. SatayKing

    SatayKing Well-Known Member

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  10. Nodrog

    Nodrog Well-Known Member

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    Yes certainly probable. Hence why I take full advantage of the opportunity to reinvest whilst these benefits exist. They can tax us more down the track but we get the advantage of compounding until then. The usual story, take full advantage of tax opportunities of the day but don’t risk your retirement on generous tax breaks that may not exist in the future.

    Morrison’s last round of major Super changes will have a significant impact on large balances currently in the Super environment particularly as current members die. That’s when the large balances will be forced out of Super. I think many are clueless about this area which could be a shock when say one of the SMSF members (typically spouse) dies.
     
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  11. ChrisP73

    ChrisP73 Well-Known Member

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    @Nodrog I recall you're under 65 and hence don't need to satisfy the work test so continue to contribute to your accumulation account for yourself and Mrs @Nodrog to the maximum extent? (25k per an per person?)
     
  12. Nodrog

    Nodrog Well-Known Member

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    Actually although I’ve been receiving a SMSF pension since 55 I don’t turn 60 till Jan 2020 hence I’m not paying this year’s minimum pension till after that when it’s tax free:).

    Yes we’ve been taking advantage of the maximum concessional contribution including “double dipping” on occasion to reduce a lumpy CG.
     
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  13. Francesco

    Francesco Well-Known Member

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    +1
     
  14. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    SMSF members should be shouting loud and proud to the enquiry requesting this measure when the details are announced. Public submissions are important. I would be wealthy if I had $10 from everyone who owns a resi property who asked if their smsf can buy it (Answer is always NO).

    The very nature of the retirement benefits in super are hampered by this rule which has no obvious basis of stopping retirement benefits. Requiring a registered valuer to assess the transfer value is a simple avoidance approach. And if its a unencumbered property why not allow it across several years ? Sure the industry funds will shout it down since they cannot receive property transfers but the 500,000 SMSFs out there should be allowed this option.
     
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  15. ChrisP73

    ChrisP73 Well-Known Member

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    Terms of reference.

    Review of the retirement income system | Treasury Ministers

    TERMS OF REFERENCE
    As recommended by the Productivity Commission in its report Superannuation: Assessing Efficiency and Competitiveness the Government is commissioning an independent Retirement Income Review.

    Australia's retirement income system is based on three pillars:

    • a means-tested Age Pension
    • compulsory superannuation; and
    • voluntary savings, including home ownership.
    It is important that the system allows Australians to achieve adequate retirement incomes, is fiscally sustainable and provides appropriate incentives for self-provision in retirement.

    The Review will establish a fact base of the current retirement income system that will improve understanding of its operation and the outcomes it is delivering for Australians.

    The Retirement Income Review will identify:

    • how the retirement income system supports Australians in retirement;
    • the role of each pillar in supporting Australians through retirement;
    • distributional impacts across the population and over time; and
    • the impact of current policy settings on public finances.
     
  16. ChrisP73

    ChrisP73 Well-Known Member

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  17. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Dont expect anything good
     
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  18. ChrisP73

    ChrisP73 Well-Known Member

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    Keating article from 2013

    Dividend imputation and superannuation are worth fighting for

    "Superannuation is about de-risking the future. In the system I set up, people were encouraged to salary sacrifice in later life, when mortgages had been paid off and they had discretionary income. Under that policy, people could salary sacrifice up to $100,000 a year when over 50 years of age. I believe the current limit of only $25,000 is too low, certainly for those over 50."

    Tend to agree. Of course the $25k limit would be fine for someone who was able to contribute throughout their lifetime but this isn't always the case.
     
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  19. Marg4000

    Marg4000 Well-Known Member

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    The $100K salary sacrifice at the time for people over 50 was specifically designed to recognise that many people did not have access to superannuation for most of their working lives, unless working in public service or for big companies.

    It was intended as “catch up”, and was not a long term plan.
     
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  20. TSK

    TSK Well-Known Member

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