The concept of superannuation has long been a cornerstone of retirement planning, but a recent outburst by a former reality TV star has ignited a debate online. Estelle Landy, known for her stint on Big Brother and as a multiple property owner, has taken to social media with a critique of the superannuation system, calling it a ‘scam’ and demanding a radical overhaul.
Her perspective is shaped by her 14-year tenure in a government role dealing with superannuation, where she reportedly witnessed the devastating impact of the global financial crisis on everyday Australians. Her frustration was palpable as she recounted how she saw ‘first-hand’ people’s life savings decimated.
Superannuation, or ‘super’ as it’s colloquially known, is a compulsory long-term savings plan designed to provide Australians with a nest egg for their retirement years. Employers are required to contribute a percentage of an employee’s earnings into a super fund, which is then invested on their behalf.
Over time, these contributions, along with any additional voluntary deposits, accumulate with the aim of ensuring a comfortable retirement.
Warning: The video below contains expletives. Proceed to watch with caution.
@estelleey Superannuation is a scam! #fyp #fypシ ♬ original sound – estelleey
However, Landy’s rant has struck a chord with others who feel trapped by the system’s structure. She argues that the policy unfairly restricts access to one’s own money, criticising the way funds are managed and the fees charged by superannuation companies.
‘They get to hold on to your money, invest it wherever they want; it doesn’t matter if they lose it,’ Landy said, questioning the efficacy of the current system.
‘They make money on the interest of holding your funds, yet you have to pay them a monthly fee to do the work for you. The fact that people think we shouldn’t have access to our super when we need it is f***ed up. It’s a scam, the whole system needs to be dismantled.’
Landy’s post ignited a discussion online, with Australians from all walks of life weighing in. Some echoed her sentiments, sharing their own stories of financial strain and the desire to access their super funds to alleviate immediate pressures, such as buying a home or dealing with personal emergencies.
‘Yes, I agree. I’m 55 and if I could take 25/30k of my super right now, it would literally be life-saving,’ agreed one commenter.
‘As someone on the way to retirement, I totally agree,’ echoed another.
‘Yes, I agree! I have enough to use it on a house deposit but I’m stuck renting, paying off someone else’s house,’ wrote someone else.
‘This is why I do not have any superannuation. I earn 17% interest annually in my dedicated bank accounts,’ said one commenter.
‘[I’ve] been saying this for years,’ remarked another.
‘100% agree! What’s worse is how many people don’t make it to retirement age and the super fund companies keep your payments and people pay extra into their funds,’ opined a different person.
On the other side of the argument, many defended the superannuation system, highlighting its benefits. Critics of Landy’s view point out that the superannuation policy is designed to prevent individuals from depleting their retirement funds prematurely, ensuring a safety net for the future.
‘Super is not a scam. If you choose your own superfund and put as much money in as you can, you will do very well,’ argued one person.
‘You decide who manages your super and how it’s invested. You have control. Super is [a] fabulous low-tax investment. I just retired at 60, [and] made super contributions for only 25 years but in a [self-managed super fund]. [I] will live off more money than I made working,’ wrote a different commenter.
‘I’m glad I have it. The monthly fee is tiny,’ shared someone else.
‘It’s not a scam. Once you understand it, then you’ll know how to make it work for yourself,’ opined another.
The controversy arrives on the heels of Opposition Leader Peter Dutton’s announcement of a proposed change to superannuation policy. In a bid to address housing affordability, he has pledged to allow first-home buyers—and now, divorced women—to use up to $50,000 of their super to enter the property market.
This policy shift underscores the ongoing debate about the role of superannuation in addressing current economic challenges while safeguarding retirement security.
At YourLifeChoices, we understand the complexities of planning for retirement and the importance of having access to your hard-earned money when you need it most. We invite you to share your thoughts and experiences with superannuation. Join the discussion and let us know where you stand on this matter.
Also read: One in four Australians in the dark about their superannuation insurance cover, survey finds
Superannuation is not a scam, it provides money for retirement. It has a number of benefits.
Firstly, because it’s a pooled investment adding together the funds of many members, it enables investments to be made in many different asset classes, that individuals may not have access too.
Sound investment mean diversifying among different sectors including property, shares, cash and fixed interest. It enables further diversification within those classes. For example with property, offices, industrial, commercial and infrastructure. It provides a greater spread of investments.
Secondly, by pooling funds investments are made growing the economy, as funds are available for new projects. A new shopping centre could be built as the superannuation fund with the money from many investors is pooled, giving a source of funds.
There are costs in investing. This Big Brother contestant when buying her property would be paying, conveyancing, there would be titles office fees, Stamp Duty. During her period of ownership she is paying rates, repairs, insurance. There are holding costs. Superannuation funds buying and selling shares, would incur brokerage. They are also dealing with the paperwork.
I worked in banking for many years, many investors or business owners see their business as their superannuation. We all know how many businesses fail. Taxi licences were once great investments worth hundreds of thousands of dollars. Uber and ride share companies disrupted that industry and they are now worth less.
Superannuation is taxed concessionally, lower taxes are paid on investment gains and on income.
Yes, it’s hard to access but that ensures it’s growing. Many people given the chance would access those funds depleting the funds. The pandemic demonstrated this, as people experiencing hardships were withdrawing.
There are financial hardship provisions and $10000 can be accessed. This is taxed. It’s a disincentive to withdraw.
As our society ages, there are fewer working people supporting a growing number of pensioners. This puts pressure on pensions and government, ultimately the taxpayer. Superannuation as it grows means more people can provide for their retirement. Some may have enough to avoid the pension, others may have reduced pension, still getting some. Reduced pensions save the taxpayer.
The Coalition has proposed allowing access for housing. Not a good idea, the reason is that it leads to rising prices. With extra money, buyers bid more. Again many people lose their houses. Couples separate, they divorce, illness strikes, unemployment, homes can be lost. Superannuation outside of this system is protected asset. Accessing super to buy a house, may mean lower retirement income.
Superannuation is complex, governments are always changing rules, and there are flaws, but it’s no scam, many benefits and advantages.
Peter, as a retired Public Accountant your summary of the system and its benefits and flaws is the best I have read in a very long time. I hope more of YLC members read it!
“ Superannuation is not a scam, it provides money for retirement.”
Exactly correct!!!
It provides money to pay for your admission into an Aged Care Facility that is offered for free if you have no assets aka Super!!!
It is just another scam which provides another tax dodge for the wealthy. The higher your income the more tax you can avoid using your super. In fact so much tax is avoided by the well heeled that it would be cheaper for the government to pay everyone a universal age pension than continue with all the super concessions and other concessions which mainly benefit the rich.
But this will not happen because Australia’s taxation system has been heavily weighted in favour of the very wealthy for decades.
The government wants us to have Super so even though most people pay taxes all of their working life and when they retire thinking they can get a pension they find that their superannuation is classed as an asset and if they were thrifty and saved some money for their future they probably cannot qualify for a pension.
Super a scam? That depends upon your income. Super is a legally sanctioned tax avoidance scheme. In my last three years of working I put in pre tax $100,000 each year into Super which bought my ATO Taxable income down to zero tax. That rule has now changed. Which raises the next issue that Super rules change virtually every Budget to the disadvantage of having cash in Super. At the moment Super Earnings are tax free, as is an income from your Super savings. That rule will change and that will disappoint those who have saved cash in Super. BUT, the reality check wilful be those looking for a more comfortable retirement will be a huge shock. Without going into details, the more you have in Super will mean the less you get in Aged Care when compared to those with no assets. When entering an Aged Care Facility (Old People’s Home), if you have no savings aka Super thrn you get such accommodation for free but if you have Super savings then be prepared to forfeit those savings to pay your way in an Aged Care Facility!
If you have saved $1m in Super and draw down at 5% your income is $50,000. But if a couple with your own home you get an Aged Pension of $50,000 with benefits if you have no savings.
So, who is the mug here? But there is a sweet spot for Supersavings. If, as a couple, you have the lower threshold in assests that allow you to recieve the full Aged Pension you get an annual income of $50,000 plus draw down Sup
Cont, you get $50,000 Aged Pension free money plus draw down your Super savings by 5% and get an extra $25,000 per yr.
Recap, $1m in Super at 5% gives you an income of just $50,000 and no part Aged Pension. Self funded retirees cop it in the financial neck!
Have no savings and get the full Aged Pension with benefits of $50,000.
But if you have only $500,000 in Super you get an annual income of $75,000.
Of course these are rubbery figures but I have made the maths simple to get the message across!
Of course, there is yet another way for a ‘couple’ to increase their Aged Pension payment. But that’s another rort, I mean, story.
Super, the Aged Pension and Retirement Aged Care have overlapping complex rules. In my view, you don’t need Superannuation Financial advice … you really need Whole of Life financial advice … and who gets that???
My view is that it works well in accumulation phase and early stage or retirement phase, but then it has policy contradictions with Agedcare policies and real life situations that are plain unfair against th e elderley when they are at their their most vulnerable,during extreme sickness.
Too much overlap and legislation which has unintended consequences and a bureaucracy who doesn’t listen to arguement or common
At over 75 and diagnosed with a terminal disease I will move my funds from super back into the real world where yes I pay tax but I also e flexability and tax deductions.
Cheers
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Cheers