Federal Budget 2018: will super be left unchanged?

The Federal Budget has fiddled with super every year for the past nine years.

businessman backing off

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?



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    8th May 2018
    Gee, now we are being asked to comment on something that hasn't happened, may not happen or if it does happen we have no idea of what will happen. Congratulations Janelle, you've really scraped the bottom of the barrel on topics.
    8th May 2018
    Bravo! This is the sort of thing the media does all the time - and look at the same old frenzy it has created. We really do need to learn to be more critical readers!!!
    Young Simmo
    8th May 2018
    OK, something else that hasn't happened yet, but I am curious. Does anybody have any clues as to what sort of help for pensioners that's being sprouted could be? I meal real stuff, not free accountants for millionairs.
    8th May 2018
    It's about time that the the Government butted right out of superannuation, it's not their money they have been playing around with.
    Lighten up
    8th May 2018
    Wasn't it the Government who brought it in to start with??
    Old Geezer
    8th May 2018
    They will be touching super because there are some things they need to fix.
    8th May 2018
    They will touching super so they can take it out of our pockets and put it in theirs.
    8th May 2018
    They are like Robin Hood only they take from the poor and give to the rich.

    8th May 2018
    They SHOULD be fixing the superannuation tax concessions to be fair and support lower income earners to build retirement savings instead of loading the coffers of the rich. The current system hands out way too much to high income earners and way too little to battlers. The claim that concessions cut aged pension costs is BS, because the folk who benefit most will never need a pension anyway. Change it to 15% less than the person's marginal tax rate. Still a strong incentive to use super (with a refund paid to the fund if that results in a negative tax), but instead of handing out far too much to the wealthy, everyone gets a fair benefit.

    The other ESSENTIAL change is to abolish the assets test, or at least raise the limit dramatically, so as to remove the stupid disincentive to saving. What is the point of funding superannuation tax concessions to encourage people to build a retirement nest egg, then punishing them for doing so and inviting them to divest assets to avoid losing needed income? It's utterly IDIOTIC!

    Preventing retirees from retaining assets and savings to cover expenses later in retirement means higher government costs for aged pensions, aged care, health care for the aged, and a host of other necessities. Poorer grandparents are unable to help their children cover education and medical costs for grandchildren. Ultimately, less wealth handed down means the next generation of retirees is poorer and fewer young own homes. It's STUPID. It's economically unsustainable, and short-sighted mean and illogical policies like this are the cause of increasing debt.
    Mad as Hell
    8th May 2018
    The 2017 changes to the Pensioner Assets Test equates to stolen money from 330,000 now and more shortly.

    The LNP and Greens lost all credibility. With their outright lies of broken election promises and inability to manage our entitlements. Why should I trust them.

    Bring on the election.
    8th May 2018
    LNP/Labor/Greens all Globalist parties so do not trust them. The old landscape needs a makeover to bring in changes that favour and support Australians . The Australian Conservatives, ALA and even One Nation are parties that put Australia and its people first. Nation States work best. Ignore them at your peril.
    8th May 2018
    You have got to be joking niemakawa, the 3 parties you mention above should be avoided at all costs. I could say more about these 3 but good manners prevent me doing this on this site.
    9th May 2018
    Agree, Mad as hell. In addition to the 330,000 who had it reduced, there were 91,000 who lost pension altogether, and add to that the newly retired each year who cannot get the pension. We all need to join up and throw all the current seat-warmers, especially from the 3 main parties, out by putting them last in preferences - vote for whoever else you like it doesn't matter, the 3-party system needs to be shaken up.
    On the Ball
    8th May 2018
    While introducing compulsory super was a great and necessary idea, the way of collecting the installments was open to abuse.
    When it started it amounted to 9% of my salary. Paid by the company. It only took a few years (in those days of pay increases!) for the 9% to be swallowed up in lost wage increases.
    Then the company I worked for was taken over by a larger international player. They changed the wage structure to a "package" which included the super guarantee. But the negotiation was on the package, not the basic wage plus super. That lasted for many years. Effectively all employees were paying their own super guarantee.
    The idea of a few rapid increases to the guarantee will prevent what I described above. - And in these times of zero wage increases that will mean a genuine increase in the super guarantee.
    OR... Legislation should be introduced that says wages must be described as the basic pay. Then add any extras such as car, super guarantee etc.
    8th May 2018
    So many other countries pay a much larger % of their wages into some form of super, I cannot see why we can't do that here too.
    8th May 2018
    So many other countries pay a much larger % of their wages into some form of super, I cannot see why we can't do that here too.
    9th May 2018
    1. Private company superannuation charge fees. Every year billions of dollars go out of the Australian economy to hedge fund managers and possibly off shore companies.

    2. When the scheme was set up it was intended that it would replace some very strong reliable superannuation schemes. In reality it fell considerably short of that mark. In fact the average superfund on my calculations has returned around 5% compound (ups and downs) over the duration of investment.

    3. The personal money invested outside superannuation in property etc. has increased 20 fold over the last 30 years.

    4. Our younger generation are so committed to housing debt that even the smallest % increase in super will tip many families into bankruptcy. If you want to see what happens then just ask the countries effected by the GFC.

    So Misty unless the government sets up a fee free superfund that we can contribute to with a guaranteed return until death do we part I can promise you (my mistake learnt) that putting extra into super was a huge mistake.
    9th May 2018
    Thanks for that info Rosret.

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