Changes to the superannuation system announced today by the Federal Government are little more than a cynical attempt to slash the incomes of Age Pensioners.
Treasurer Wayne Swan and Financial Services Minister Bill Shorten were quick to claim their proposed reforms targeted the rich, but failed to explain that the hardest-hit would be Age Pensioners with modest levels of retirement savings.
From 1 July 2015, claimants for Age Pension will lose the current concessional treatment applied to retirement income streams.
“Our research confirms that a couple who reach Age Pension age with superannuation savings of $300,000 and no other assets, will be $2,000 worse off each year under the new rules,” Philippa Cassidy, director of independent advisory and research firm Wills Financial Group said.
“The Treasurer was quick to reassure the rich that only those with superannuation balances above $2 million need be concerned, but he didn’t mention the hundreds of thousands of ordinary Australians who will retire in coming years, only to find their Age Pension entitlement has been slashed.”
“Rather than reform the superannuation system to help those in need, the Government appears to be picking the pockets of older Australians just to keep the top end of town happy,” Ms Cassidy said.
“Given the tax proposed for millionaire superannuants can be completely sidestepped with simple planning, it appears the billions of dollars in savings will be coming from our Age Pensioners.”