Time to leave super alone?

What do we think we know about Federal Budget 2018? Tax cuts for some, road and rail funding across the states and an injection of money to cut waiting times for older Australians seeking at-home care.

What’s not on the list? Analysts suggest that for the first time since 2008, there will be no changes to superannuation. And the super industry is quietly rejoicing that Federal Treasurer Scott Morrison has his sights set firmly on other areas.

The Association of Superannuation Funds of Australia (ASFA) is cautiously optimistic that contribution limits and compulsory employer Superannuation Guarantee payments will be unchanged in the next financial year.

“In the Federal Budget, the Government has a unique opportunity to reaffirm their commitment to retirees by simply leaving the system alone,” ASFA chief executive Martin Fahy told news.com.

“Constant tinkering with the system ultimately undermines community confidence at a time when we want to encourage more people to be self-funded in retirement,” he said.

“Australians deserve certainty when making investment decisions that their savings will not be eroded by constant shifts in Budget policy.”

YourLifeChoices’ recent Retirement Income and Financial Literacy Survey found that 40.5 per cent of the 5000-plus people who responded said superannuation was too complicated to understand properly. A case of too many changes too often?

The following changes were recently catalogued by News Limited.

  • 2009: Contribution caps halved, co-contribution reduced.
  • 2010: Employer contributions – the Super Guarantee (SG) – extended to age 74.
  • 2011: MySuper created; self-managed super fund (SMSF) changes.
  • 2012: Higher caps for over-50s.
  • 2013: SG rise to 12 per cent by 2019.
  • 2014: SG rise delayed; changes to pension income.
  • 2015: Tougher Age Pension rules.
  • 2016: More than 10 changes relating to lower contribution caps and tax.
  • 2017: First home super saver scheme; downsizing for retirees to take effect from 1 July this year.


AMP Capital chief economist Shane Oliver told News Limited that plans to increase compulsory employer super payments to 12 per cent might be delayed again.

Employer contributions are set to rise from 9.5 to 10 per cent in 2021, and then by an extra 0.5 points each year until 2025 when contributions reach 12 per cent.

The Grattan Institute said last week that an SG increase from the current 9.5 per cent was unnecessary, was already hurting wages and would do little to help low-income Australians.

“Unless stopped, the program will cut wage rises, cost the federal budget billions well into the future, and actually harm some retirement incomes,” said institute chief executive John Daley.

“Our research shows that increasing the rate to 12 per cent would make future pension payments two per cent lower than otherwise,” Mr Daley told Fairfax Media. “By suppressing pension payments, it could make existing pensioners worse off by up to $460 a year for singles and $640 a year for couples.”

YourLifeChoices is in the Federal Budget lock-up and will report the key issues for retirees in a special wrap on Tuesday night and in detail on Wednesday.

Does super confuse you? Have you been able to keep track of the changes?

Related articles:
Do mooted tax cuts help retirees?
Lift Newstart and Aged Pension
Key Budget issues for retirees
Federal Budget 2018: Coalition trading tax cuts for votes?

Written by Janelle Ward

Energetic and skilled editor and writer with expert knowledge of retirement, retirement income, superannuation and retirement planning.

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