Changes in Federal Budget to superannuation
In last week's Federal Budget the Government confirmed the retirement age would be lifted to 70 by the year 2035.
This week the Treasurer Joe Hockey indicated that there is further hard hitting still to come and confirmed that the Government is thinking of changing the age at which you can access your super.
Some of the things in the Budget that relate to superannuation include slowing the growth in the Superannuation Guarantee (SG) - compulsory employer super contribution. Under the Labour Government SG entitlements were set to jump from the current 9% of salary to 12% by July 2019, an eventual 33% increase in superannuation contributions.The increase to 9.5% due on 1 July 2014 is still going to happen but then it is frozen for 4 years and won’t reach 12% until the 2022-23 year. This affects everybody who is working.
The second adverse change the Government is going ahead with is axing the Low Income Super Contribution Scheme, that is, re-introducing tax on super contributions for low income earners – affects 3.6 million people.
Just for the record our view is that raising the pension age ignores the fact that mature age employees struggle to obtain work, and many Australians are not physically able to work full-time until age 70. Women who have not had access to superannuation for much of their working lives because they have had time out of the workforce to have children or other caring responsibilities or worked when women earned less than men because they worked casually or less hours or are just paid less will be worse off due to changes in the retirement age/super.
AP’s unilateral decision not to pay superannuation for new LWOP commencing 1 July (capped at 28 consecutive days) will further impact disproportionately on women who take LWOP beyond the maternity leave to care for pre-school age children.
