The Government has finally announced some changes to their proposed legislation of Superannuation in the retirement pension phase, following a badly managed debate about “fairness” and “sustainability”.
The concept of a low level tax (15%) on pensions that generate high incomes is inherently bad if it assists and partially subisdises those on the lowest level to boost their superannuation. However, there are a number of loopholes and exceptions to the concept that as usual seem to have not been thought out, nor discussed in detail with various stakeholders and industry participants.
One area that has been overlooked in all this debate is the change from 2015 to the treatment of allocated pensions for centrelink purposes. It will become less generous for thos penions intiated after July 1, 2015. That is – the centrelink aged part pension eligiblity is likely to be signficantly less for those commencing a retirement after July 1, 2015.