Would this change to super make a difference for you? 9



View Profile
Yet another report has been released today calling for a top-down overview of Australia’s retirement income system to prevent an poverty crisis.
The Committee for Economical Development Australia (CEDA) report released today has made several recommendations that it says will help create a sustainable and fair superannuation system. Research released in April found that between one and 1.5 million Australians live in poverty and the elderly, particularly those who do not own their home, are an “at-risk” group.
“Our retirement system should ensure Australians can retire with dignity and an adequate living standard, while providing a social safety net for those cannot afford to save enough for retirement,” said CEDA Chief Executive, Professor Stephen Martin.
At the core of the report is the recommendation that all homeowners be allowed to make mortgage payments tax deductible, instead of only those who own a second or third property.
“One option would be make the family home part of the assets test for the Age Pension and change superannuation payments to an after income tax payment, with all other super tax concessions removed,” said Professor Martin.
“Alternatively, mortgage payments on the family home could be allowed to be made pre-tax.”
Treasurer Joe Hockey mentioned this idea earlier in the year and was almost universally slammed on the grounds it would damage the integrity of the super system and push house prices up even more.
Another area the think-tank says needs review is super concessions: “Obviously taxation arrangements need review because currently concessions are benefiting the rich and are being used as tax mitigation measures rather than to encourage retirement savings.”
But the major finding of the report is similar to that of the National Reform Summit: that we need to roll up our sleeves and rethink the whole system.
“There has been a lot of talk and tweaking of retirement policy aimed at reducing the burden on government, but what Australia needs is a robust discussion on all the options to ensure long term Australians can retire comfortably.
“We strongly agree with the sentiments at last week’s National Reform Summit that tinkering at the edges is no longer an option and that discussion needs to broaden on this important issue. “The system needs to be reviewed in its entirety. Ensuring retirement policies are not too onerous on the Federal Budget should be an outcome, but the focus must be on ensuring a sustainable system that delivers an adequate living standard for retirees.”
What do you think of these recommendations? Would it make a difference to your situation if your home repayments were tax deductible? 

Starts at 60 Writers

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

  1. I think they should not remove the super concessions. They should be doing everything they can to encourage Australians to make extra contributions to super. It stands to reason that if you have enough in super to support yourself than you will not need the age pension. This should be the end aim to get as many people as possible to be self funded.

  2. It would hit the middle income earners. The rich will be unaffected, they have other ways of ensuring some tax free income and the poor will always rely on the pension. In the US mortgage payments are made pre-tax.

  3. Leave it as it is , its fair and it does allow middle income earners to retire and SPEND which helps the economy. Check out who are at the movies clubs restaurants and stores during the day.US.

    1 REPLY
    • I’m a non drinker and non smoker and I can’t remember the last time I was in a club. As best as I can estimate I had around 15,000 restaurant meals during my working life so that novelty has worn off so I’m not contributing to that part of the economy.

  4. I think some of the super concessions for the very rich only should go and home buyers should be able to reduce income by the amount of mortgage interest they pay the same as investors. However only on the amount of their original mortgage so there is no incentive to keep the mortgage high by withdrawing equity and forcing the interest component to be higher.

  5. By making the family home part of the assets test for the Age Pension, This would be seen as a punishment of the people who have worked and saved to buy their house so as they can have it easier in retirement, While the ones who have not saved or perhaps not worked or even just decided to have a good time, rather than be prudent with their money and letting other look after them, Its not on and if The labor party want to go down that road they will never get elected, Mind you they have lied before remember the no Carbon tax promises form Julia Gillard and Kevin Rudd. and as soon as they were elected they brought it in, At least Abbot kept his promise and scrapped it.

  6. For the past 40 years no federal government has had the intestinal fortitude to start with a clean sheet. And for years I went from job to job (all very well paid) cashing in my super as I changed.

    Then finally after I had cleared all of the debts caused by the ex I decided to salary sacrifice and dump as much as I could into a fund at a low tax rate and retire in 5 years. And yes I did that 17 years ago.

    From the small amount I have read on the latest proposal I could be worse off but then I have a solution for that problem and it is called downsizing. But that is another story. B|

  7. What can we say about super? It’s difficult to know what will happen with our funds. With all the interferences from corrupt brokers & GFC govt changes etc I feel it’s not stable & certain. Good luck if anyone has good control & secure funds. I don’t have much faith at all. We need to ensure we have good advice & a trustworthy fiancé advisor.

Leave a Reply

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