With less than one week until the Federal election on July 2, one of the main issues of concern for those nearing retirement and those already retired is how the changes announced in the Federal Budget 2016-17 will affect their superannuation balances and retirement income.
Financial guru and Starts at 60 regular, Noel Whittaker, says he is staggered that at this stage of the election campaign, Labor has not got a superannuation policy.
“I spent all of last week [June 20-26] on [Bill] Shorten’s tail trying to get it,” Whittaker tells Starts at 60.
He highlights two policies that have been sitting on the ALP website for the last six months:
- That if you earn $250,000 you lost 30 per cent entry tax
- That if you have approximately $2 million in super you will be paying more tax on that.
However, there is little difference separating the Labor policy on super with that of the Liberal party.
Labor and Liberal super policies very similar except Labor will not be retrospective. Basically they all want our money. #superannuation
— Noel Whittaker (@NoelWhittaker) May 6, 2016
He says what the Coalition has done is add to those policies so that those aged between 65 and 75 years can contribute to their super regardless of whether or not they are working, and a person who is a wage earner can get a tax deduction for their own super contributions. These would take effect from July 1, 2017.
Under existing rules, a person aged between 65 and 75 years cannot contribute to super unless they pass a work test, which involves working 40 hours in 30 consecutive days in the year they wish to contribute.
Whittaker says people are genuinely tired of being thrown the party line and they “need to ask their ALP candidates ‘Where do you stand on people between 65 and 75 contributing?’
“People have been pushing for years for a tax deduction on their contributions,” Whittaker says. “The crazy rules now are that if the boss makes a contribution — which they must — then you can’t get a tax deduction unless you have a salary sacrifice arrangement.”
However, Whittaker says some bosses are taking that amount out of your compulsory super contribution and effectively conning you.
According to Whittaker, Labor needs to reveal its policy for superannuation and it needs to do it before the July 2 election.