Retirees’ lump sum super payments could soon end 284



View Profile

If you’re entering retirement or considering it soon, this is big news for you, and not necessarily good news either. According to SMH, Treasury executive director and COO John Lonsdale has indicated that soon new retirees will most likely be unable to take superannuation as a lump sum. Instead, they will have to access it through a structured self-funded pension.

These are recommendations from the financial system inquiry put forward to overhaul superannuation.

“Superannuation trustees should be cautiously optimistic that the framework will go towards something like what is outlined by the inquiry. That said there are still a lot of details that need to be understood,” Mr Lonsdale said at the Australian Securities and Investments Commission annual conference in Sydney on Tuesday, SMH reports.

The inquiry’s key finding was that it was unwise to continue to allow people access to their super as a lump sum when they finish work. It seems this measure is being considered to save Government funds given to pensioners who spend their superannuation in one go and/or rely on the pension.

Currently, taking a lump sum payment out of your superannuation is tax free to those over 60. Foreign Investment Review Board chairman Brian Wilson, showed his support for a default pension system funded by our own super.

He said, “The importance of reforming the rules governing the payout phase of superannuation was clear when we did the Cooper review but the government of the time wasn’t ready to make changes so we squibbed it,” Mr Wilson said.

According to Superannuation Consumers Centre chairwoman Jenni Mack, this proposed move is in the best interest of consumers. “Expecting a 65-year-old who has never managed a bucket of money before to suddenly know how to do so is exposing them to too much risk,” Ms Mack said. Do you agree? Or is that just stereotyping a minority as the majority?


What do you think? Is it a good idea? Should there be a government managed pension fund that uses our super to give us payments? Or should we be in control of our superannuation? 

Starts at 60 Writers

The Starts at 60 writers team seek out interesting topics and write them especially for you.

  1. So rather than pay your mortgage off when you retire, they’d rather you keep paying crippling interest rates to the bank. It’s a form of indentured servitude.

    3 REPLY
    • Gillian, obviously you never lived through 18 percent interest rates. When my wife and I did, we didn’t earn very much money and we were essentially a one income family, I worked extra jobs to make ends meet. That was our choice. 5 or 6 percent interest on a mortgage is nothing. We are now retired and at the end of my career I earned a significant income. A couple of times during my working life we had to draw on our superannuation (because of unemployment) . I never, let me repeat, never, went to Centrelink for help. Having said that, I was on the brink.

      So in all of this, my attitude is that people shouldn’t be able to draw their super in a lump sum. It defeats the intention of superannuation and if the superannuation people have is insufficient, then there is a case for them to have some contribution from the government.

      The “top up” from the government may entitle the recipient to the equivalent benefits of a pensioner. That’s something to consider.

      So, all-in-all, my view is, no lump sum.

  2. Yes this should happen to at least the bulk of a super payout. Perhaps a relatively small lump sum, to pay off mortgage, credit card debts, etc and then the bulk rolled over into an annuity/pension paid fortnightly or monthly. The whole idea of super is to support us in our retirement,

    5 REPLY
    • Your joking aren’t you? My super will go nowhere near paying”off” my mortgage! I will need to pay it straight off my mortgage in order to refinance the balance and make it more manageable! Not all of us are that fortunate!

    • Pensioners are the only ones who should have the right to keep what they have worked all there life for were the ones who made this country without our taxes who’s going to keep the single mums who think there payments are a right get lost

    • Yes super should be made to be a retirement pension with small lump sums allowed. The days of taking a large lump sum and frittering it away or more likely organizing it elsewhere so you can get a govt pension has to stop.
      Pensions should be for those who genuinely need it.

  3. Whose money is this anyway? The Government should keep out of it, taxes are paid through your super over the life of it. I am so tired of those that think because we are getting older, we are also getting senile and so don’t need much. Grrrr!

    8 REPLY
    • Agree completely! The worst part is, that most of this is dumped on us by fat cat politicians who get an overgenerous fully indexed CG pension, paid for by tax-payers! Not Happy Either… 🙁

    • Liberals are going to put this in place and labour will benefit from it when they get back into power! Abbott and Co are so stupid!

    • I agree with you Ann I am over it, sure things need to change, bring the changes into affect for people entering the work force now, they hve time to allow for retirement, we don’t have time !

      1 REPLY
      • as a financial counsellor I resent being told that I can’t handle my own money.

    • Can “start @ sixty ” give more info about the govt decision PLS, a lot of people are not interested about the survey but are more interested a bout the details of what we are aloud to do from now and are these decisions officials???thk u

    • we only have one option..make sure you tell everyone you know what is going on..then we vote to vote the mongrels out

      1 REPLY
      • There is no political party worth voting for, there is no difference which one you vote for. The parliamentary members are only interested in making their own pockets fatter.

    • I am thoroughly fed up with the ongoing “attacks” on the baby boomers. My super, is just that – MINE. Take your grubby mitts off of my super.

    • No more stupid than the labor camp ‘ who fiddled with our super , reduced the limit for putting extra funds into our super and raised the fine for going over the limit .( even $100)
      Then reduced the time limit on taking the funds in dormant bank accounts . So don’t leave your bank accounts un touched or the finds automatically become government owned .

      You ask who’s money is
      it ??? Obviously not ours
      if it cans be touched by anyone

  4. I just get more confused. I only have a very small amount of super and don’t want to use it till I absolutely have to. I don’t have a mortgage and not retiring age but wonder what is happening to the little I have while I am out of work and can’t put any into it.

    2 REPLY
    • this is terrible I am so sorry Fran..this Government is determined to punish the Boomers as hard as it can.. they a bunch of low life bastards..don’t panic yet..hopefully Labor can block it

    • Fran..sorry sweetie am back..ring your super fund and ask for a statement..I have a friend who has been unemployed through no choice of his own for 8 months.. his super is not going up as fast but he has lost no money as yet because of fee’ you he was worried about it

  5. It seems to me that if it is your money (which it is) then you should be able to look after it yourself, they don’t seem to give retirees enough credit, do the government think we are children just because we have retired. Some retirees out there are very financially savvy.

  6. What a sensible Idea, BUT it depends on the amount, under $50K I think you should be able to take i.

  7. I was left with very young children to bring up on my own & was never able to own my home, but I always put as much as I could afford into super thinking when I retire I would be able to buy myself a small unit to live in, under this idea I won’t be able to do this & will have to keep renting, yes I’d have my super to top up my pension but then I will also be able to receive rental assistance as well on top, so how is the government saving money by having to pay me that, at least if I could buy my own place they wouldn’t have to pay for rental assistance.

    2 REPLY
    • I just got home..and no use telling you already know..we need to vote the bastards out and lyn for me to swear is a big deal ..I never swear but this Government resorts me to drastic language

    • I’m hearing you Libbi, we’ve been talking about this at work today & people of my age here are not happy, those that will still have money to pay off their homes when they want to go in retirement won’t be able to take a bulk amount from their super to do it & they have been planing on doing that just as I had been planing to get myself something that would mean security for myself in retirement, I’m sorry now I’ve been adding as much as I could all these years to try & help myself, how can you plan for the future when these mongrels keep changing the rules.

  8. I have no super.i did have some super…but it dissappeared.cant take these companies to court because I cant afford it

    1 REPLY
    • You don’t have to take them to court. Ring the superannuation tribunal and as to lodge a complaint. They have to do the work. My daughter wasn’t paid her and there after her employer for it on her behalf.

Leave a Reply

Your email address will not be published. Required fields are marked *