Depends. Lowly paid workers still can get some superannuation and the proposal will not impact them. However, if you are on say $150k (figure plucked out of the air,) it means contributing to superannuation would get you a greater tax benefit. It's a matter of marginal tax rates v 15% contribuion tax in superannuation. Plus higher income earners may be able to make non-concessional contributions.
Superannuation, the ultimate government cash cow?
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Depends. Lowly paid workers still can get some superannuation and the proposal will not impact them. However, if you are on say $150k (figure plucked out of the air,) it means contributing to superannuation would get you a greater tax benefit. It's a matter of marginal tax rates v 15% contribuion tax in superannuation. Plus higher income earners may be able to make non-concessional contributions.
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i have a natural dislike of Sydney ( want to leave as soon as i arrive ) so that would explain my knowledge gap
cheers
Sean K
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Yeah, sliding scales in there I guess.
Is it true that if you lie your pants actually catch fire? Someone call the fire brigade for #AirbusAlbo's pants.
Dona Ferentes
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That is my reading. It's a shame ambiguity wedges the conversation.
It seems reasonable to me.
True.
It will be interesting to discover if the $3m is indexed and by what. I'll assume at the moment it will be covered in the Explanatory Memoranda. A possibility is linking it to the balance cap indexation.
As it stands now, and assuming the balance cap is increased to $1.9m from 1 July, it could mean a member with $3m would have a pension account of $1.9m and the remainder of $1.1m in accumulation attracting 15% tax on income and 10% on capital gains and both still receiving a refund of franking credits. Should CPI movements mean the balance cap goes up by $100k to $2m then the total goes to $3.1m as well.
It's the nuances too and how they are dealt with which will be fascinating as both could grow due to market movements in a year and the total exceeds $3m at some point - or drop below it for the same reason.
We'll have to wait for the fine details and the legislation then see what Parliament actually does.
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I never really understood why they did not go with the idea before the last election.
They could have then said they had a mandate.
The vast majority of voters who would not be affected by the legislation(not now, and most likely not into the future), would have been all in favour of it.
Perhaps they were fearful of the scare campaign by the coalition, but they could have countered it by saying the coalition were looking after their toffy rich mates who donated to the party (as a tax deduction mind you).
Now, by announcing that they will bring it in after saying they would not make any changes, they merely give the opposition some ammo to mount the "can't be trusted " meme, and it will have some credence.
And why wait till 2025/26, why not do it now?
They are not going to cop any more flak than waiting till 2025/2026.
Mick
They could have then said they had a mandate.
The vast majority of voters who would not be affected by the legislation(not now, and most likely not into the future), would have been all in favour of it.
Perhaps they were fearful of the scare campaign by the coalition, but they could have countered it by saying the coalition were looking after their toffy rich mates who donated to the party (as a tax deduction mind you).
Now, by announcing that they will bring it in after saying they would not make any changes, they merely give the opposition some ammo to mount the "can't be trusted " meme, and it will have some credence.
And why wait till 2025/26, why not do it now?
They are not going to cop any more flak than waiting till 2025/2026.
Mick
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I suppose leaving it till 2025/2026 lets their toffy rich mates get the house in order. ?
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I think delaying until 2025/26 is a reasonable thing.
It's after the next election and the coalition can go into that saying they will reverse the change and they would have a mandate for that if they somehow get in.
Meanwhile, labor can say they haven't really broken a promise not to change super, because the changes aren't in the current term and you can vote them out before they become effective if you don't like it.
It's after the next election and the coalition can go into that saying they will reverse the change and they would have a mandate for that if they somehow get in.
Meanwhile, labor can say they haven't really broken a promise not to change super, because the changes aren't in the current term and you can vote them out before they become effective if you don't like it.
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Also they may be able to adjust it to cover politicians super as well. Chance would be a fine thing.
Yeah, while superannuation for politicians may be irritating for some, it's irrelevant to me. Akin to caring about some unknown investor two blocks from me going broke or caring someone doesn't like Sydney and doesn't own a car.
As investing is a selfish process, I only care about me and mine to be brutally frank.
As for the politicians, sure they get a contribution of 15.4% (the pension aspect was stopped in 2004) but how long are most of them able to stay in Parliament. I think for the majority it is two terms so they don't get all that much when the electorate kicks them out.
As investing is a selfish process, I only care about me and mine to be brutally frank.
As for the politicians, sure they get a contribution of 15.4% (the pension aspect was stopped in 2004) but how long are most of them able to stay in Parliament. I think for the majority it is two terms so they don't get all that much when the electorate kicks them out.
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It will be interesting to see how the nuts and bolts of this plays out.
If someone has 3.5m in super, will only the earnings of the 0.5m above 3m be taxed at the higher rate? How will that be worked out?
Will the 3m limit apply to the sum of funds in accumulation and pension mode? I assume so, in which case if the sum is over 3m, will both accumulation and pension earnings be taxed at 30%?
Will defined benefit scheme pension notional values be included in the 3m cap, as they are in the transfer balance cap? Some of the payments from schemes such as CSS are already taxed at the recipient's marginal rate, less an offset.
If someone has 3.5m in super, will only the earnings of the 0.5m above 3m be taxed at the higher rate? How will that be worked out?
Will the 3m limit apply to the sum of funds in accumulation and pension mode? I assume so, in which case if the sum is over 3m, will both accumulation and pension earnings be taxed at 30%?
Will defined benefit scheme pension notional values be included in the 3m cap, as they are in the transfer balance cap? Some of the payments from schemes such as CSS are already taxed at the recipient's marginal rate, less an offset.
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You would probably care a lot more about an investor two blocks away, if he could affect your investment, as a politician can. ?
Sean K
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Politicians defined benefits will have to be included. I'm on an Defence defined benefit type pension and I know how much that's worth in the pool. Just about any politician who has been in for 10 years will be well over the $3m mark. If they don't apply it to themselves then watch out. The problem is, it affects all sides of politics, so who is going to support that?
Three mill each in super.
The rest goes into the P.P.O.R.... Way to go.
But wait...at least wait till the next election or the one after. ( Hope like hell these clowns in power , don't lead us into a war with you-know- who , over Taiwan , beforehand )
Things could change with a Liberal government , but I wouldn't rely on it . Remember Malcolm in 2016 ? None of the 80,000 are Labor voters. Are they going to pay the 30% tax or take the cheaper option of a one -off stamp duty and a more comfortable abode ?
This country doesn't need any more productive investment. ( $ 3.3 Trillion will be just fine. Surely ? )
More mansions !
The rest goes into the P.P.O.R.... Way to go.
But wait...at least wait till the next election or the one after. ( Hope like hell these clowns in power , don't lead us into a war with you-know- who , over Taiwan , beforehand )
Things could change with a Liberal government , but I wouldn't rely on it . Remember Malcolm in 2016 ? None of the 80,000 are Labor voters. Are they going to pay the 30% tax or take the cheaper option of a one -off stamp duty and a more comfortable abode ?
This country doesn't need any more productive investment. ( $ 3.3 Trillion will be just fine. Surely ? )
More mansions !
Sean K
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I vote to make this retrospective.
Are you referring to all politicians who were eligible under the scheme which applied before 2004 but are no longer in Parliament (that's when new legislation killed that one off) or those still in Parliament who were elected before 2004 such as Dutton and Albenese? I could search on who of the rest was elected before 2004 but, nah.
If the former, then I guess all who receive a DB from whatever source should be looked at - just to be fair, especially those in the CSS who did not pay one red cent to get a DB life-time CPI indexed pension with a 2/3rds reversionary benefit.
Only amounts above $3m will incur the higher rate according to the documentation I have seen. Tax time when the SMSF accounts are submitted to the ATO.
It is a combination. Pension-account tax free up to balance cap, amounts above that in accumulation account to a to make up the $3m taxed at 15% income or 10% CGT. Above a total of $3m, 30% applies. No mention yet of the CGT to apply.
No because when I buy, I have no idea who is selling or why and I don't care.
Sean K
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It just needs to be applied in the same manner. If it's retrospective in any way it applies to both civilians and pollies. If it's only on new money going in from 2025, same same.
Parliamentary Superannuation Act 2004.
- The Parliamentary Contributory Superannuation Scheme (PCSS) was closed to new members from 9 October 2004 and superannuation accumulation arrangements were established for Parliamentarians joining Parliament on or after that date.
- The accumulation arrangements were established under the Parliamentary Superannuation Act 2004 (2004 Act) and involve a Government contribution of 15.4% which is calculated on total parliamentary salaries. The Government contribution is payable into a superannuation fund chosen by the Parliamentarian.
- The 2004 Act arrangements apply only to Parliamentarians joining the Parliament who were not sitting Parliamentarians on 31 August 2004. They also apply to such Parliamentarians who return to the Parliament after a break in service.
- Existing members of the PCSS may not transfer to the 2004 Act arrangements.
Death has a way of dealing with these issues. Happens over time with closed schemes.
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