Superannuation, the ultimate government cash cow?

[Value Collector]

I am not upset at all. By all means pay for services you want.

However, the intention of taskforces report isn't that. It's suggesting wealthier people pay more whether or not they access additional services. It's subtly worded as is the usual with these reports.

Oh well, I do hope the generations which follow understand they to will have to "make contributions for services to enjoy a dignified experience in aged care." After all the oldest Gen X will be 60 next year and in not that short a time (10 years or so), they also will require care. Maybe they'll get some of what's left of Mum and Dad's wealth to help them fund it.

Maybe deferred annuity products can be offered by superannuation funds to assist with aged care residency costs.



Page 40 of the report.

View attachment 173070

Isn’t that screen shot just saying they want to point out to people ways that they can access their capital to increase their quality of life in aged care, eg maybe getting extra services as Macca said wine with dinner, or maybe extra care.

 

[Belli]

Sorry, I forget to include this part. My apologies.

 

[sptrawler]

A life on welfare, will end up being the choice of many. Lol

 

[Belli]

A life on welfare, will end up being the choice of many. Lol

Aim for it. Spend like a drunken sailor in a house of ill repute and have your home reversed mortgaged to the hilt.

To be honest, my frustrations with a lot of this is due to the last couple of my years in the public service being in this area. So glad I left as any empathy I had left was slowly being squeezed out of me.

You might like to give a bit of thought to the Retirement Income Covenant and how it should fit in (or doesn't) with the taskforce report's recommendations.

 

[divs4ever]

Sorry, I forget to include this part. My apologies.

View attachment 173073

... so double 'means-testing '

i hope that includes former senior civil servants , who are eligible for generous health-care benefits

 

[sptrawler]

Aim for it. Spend like a drunken sailor in a house of ill repute and have your home reversed mortgaged to the hilt.

To be honest, my frustrations with a lot of this is due to the last couple of my years in the public service being in this area. So glad I left as any empathy I had left was slowly being squeezed out of me.

You might like to give a bit of thought to the Retirement Income Covenant and how it should fit in (or doesn't) with the taskforce report's recommendations.

IMO super is becoming just another indirect tax on the worker, it was introduced under the auspices of 'enhancing the workers retirement' and is in lue of pay rises, the money is put away rather than given to the worker.

Then it became about 'enhancing or replacing the pension', now the funds are to be used to supply social housing and assist the transition to renewables and also pay for the workers aged care.

In the end the 'enhancing the workers retirement' could be dropped all together and the super could be absorbed into consolidated revenue, where the Government could then just pay the social expenditures (universal pensions, universal aged care, etc) as it would make it easier to administrate and be more efficient and cost effective.

Then before you know it, the pensions could be means tested and as the social expenditure is unfunded and coming out of consolidated revenue, a great idea would be to start a superannuation scheme up, to 'enhance workers pensions'.

The more things change, the more they stay the same, history repeating.
Funny how you become more cynical as you get older, I thought it was only a problem my Dad and Mum had.

As Uncle Paul mentioned recently:
“Fortunately, we have bucket loads of social capital in the superannuation system

Keating pressed Chalmers on Origin-Brookfield deal ‘scam’

Secret Treasury documents reveal former PM Paul Keating pressed the treasurer to reject Canadian private equity giant Brookfield’s $20 billion Origin tilt.

www.afr.com

 

[Value Collector]

Sorry, I forget to include this part. My apologies.

View attachment 173073

So which of that is the problem? Is it one group gets 95% funding while the other only 75%?

isn’t that because the person getting home care is funding their home accomodation themselves, and only having their care costs subsidised.

where as the resident in care is receiving both care and accomodation, so is expected to contribute a higher percentage? As they would if they lived at home with their own accomodation.

or is it the part where they are saying in general older people with assets need to contribute more?

 

[Value Collector]

IMO super is becoming just another indirect tax on the worker, it was introduced under the auspices of 'enhancing the workers retirement' and is in lue of pay rises, the money is put away rather than given to the worker.

Then it became about 'enhancing or replacing the pension', now the funds are to be used to supply social housing and assist the transition to renewables and also pay for the workers aged care.

In the end the 'enhancing the workers retirement' could be dropped all together and the super could be absorbed into consolidated revenue, where the Government could then just pay the social expenditures (universal pensions, universal aged care, etc) as it would make it easier to administrate and be more efficient and cost effective.

Then before you know it, the pensions could be means tested and as the social expenditure is unfunded and coming out of consolidated revenue, a great idea would be to start a superannuation scheme up, to 'enhance workers pensions'.

The more things change, the more they stay the same, history repeating.
Funny how you become more cynical as you get older, I thought it was only a problem my Dad and Mum had.

As Uncle Paul mentioned recently:
“Fortunately, we have bucket loads of social capital in the superannuation system

Keating pressed Chalmers on Origin-Brookfield deal ‘scam’

Secret Treasury documents reveal former PM Paul Keating pressed the treasurer to reject Canadian private equity giant Brookfield’s $20 billion Origin tilt.

www.afr.com

Super is still a great tax haven if you set it up right with good investments in it, and don’t pay to much fees or insurances.

 

[qldfrog]

IMO super is becoming just another indirect tax on the worker, it was introduced under the auspices of 'enhancing the workers retirement' and is in lue of pay rises, the money is put away rather than given to the worker.

Then it became about 'enhancing or replacing the pension', now the funds are to be used to supply social housing and assist the transition to renewables and also pay for the workers aged care.

In the end the 'enhancing the workers retirement' could be dropped all together and the super could be absorbed into consolidated revenue, where the Government could then just pay the social expenditures (universal pensions, universal aged care, etc) as it would make it easier to administrate and be more efficient and cost effective.

Then before you know it, the pensions could be means tested and as the social expenditure is unfunded and coming out of consolidated revenue, a great idea would be to start a superannuation scheme up, to 'enhance workers pensions'.

The more things change, the more they stay the same, history repeating.
Funny how you become more cynical as you get older, I thought it was only a problem my Dad and Mum had.

As Uncle Paul mentioned recently:
“Fortunately, we have bucket loads of social capital in the superannuation system

Keating pressed Chalmers on Origin-Brookfield deal ‘scam’

Secret Treasury documents reveal former PM Paul Keating pressed the treasurer to reject Canadian private equity giant Brookfield’s $20 billion Origin tilt.

www.afr.com

My thinking exactly and why I never put any extra money willingly ..

 

[JohnDe]

My thinking exactly and why I never put any extra money willingly ..

I was paying myself a wage through my business, which meant I also had to pay myself Super, workcover, and whatever else. And then, about 18 months ago, I took myself off the books and just draw an income, no more super payments and other expenses.

However, with my circumstances changing with the sale of property my wife and I have a ridiculous tax bill coming. With the help of a clever financial advisor and my accountant we have worked out how to minimise it using contributions to our super, which we can top up to the max this financial year due to a 5 year rule, and a smaller amount the following year.

I would rather have the money in my super, than in the greedy inefficient government coffers.

I am also starting a SMSF.

 

[qldfrog]

I was paying myself a wage through my business, which meant I also had to pay myself Super, workcover, and whatever else. And then, about 18 months ago, I took myself off the books and just draw an income, no more super payments and other expenses.

However, with my circumstances changing with the sale of property my wife and I have a ridiculous tax bill coming. With the help of a clever financial advisor and my accountant we have worked out how to minimise it using contributions to our super, which we can top up to the max this financial year due to a 5 year rule, and a smaller amount the following year.

I would rather have the money in my super, than in the greedy inefficient government coffers.

I am also starting a SMSF.

I understand , same here and I never paid more than minimum required, plus some partner payments etc when topped up by gov.
I stopped work when Covid hit..no choice and so fully retired then.
If I had been putting all my saving in super.. I would have been on the treadmill 10y more than I choose to.
Young people see that as so far in future, but if you intend a FIRE life, and value more your life than $.. you might think twice before committing money in a scheme you have no control on.
Very different when you are already retired or nearly there.

 

[dyna]

minimise it using contributions to our super

For those folks wishing to learn how to legally reduce big C.G. tax bills from investment R.E. sales , or how to get lump sums into superannuation , tune in weekly to Radio 2GB with Jacaranda Financial Planning or catch up with all the podcasts on their website.
This outfit also runs monthly seminars in all the State capitals . For all the tricks and traps of superannuation it's well worth attending , I reckon .Of course it's free too , plus you can pick these experts brains , after the show .

 

[sptrawler]

Super is still a great tax haven if you set it up right with good investments in it, and don’t pay to much fees or insurances.

As long as they don't bring back the limits (mins-max) drawdowns .
It's a great investment for those who have non concessional contributions, those with concessional contributions, it's a bit of a wish and a prayer.

 

[Value Collector]

It's a great investment for those who have non concessional contributions, those with concessional contributions, it's a bit of a wish and a prayer.

What do you mean?

why wouldn’t you want to make concessional contributions? that’s where you get the tax deduction.

 

[Value Collector]

I understand , same here and I never paid more than minimum required, plus some partner payments etc when topped up by gov.
I stopped work when Covid hit..no choice and so fully retired then.
If I had been putting all my saving in super.. I would have been on the treadmill 10y more than I choose to.
Young people see that as so far in future, but if you intend a FIRE life, and value more your life than $.. you might think twice before committing money in a scheme you have no control on.
Very different when you are already retired or nearly there.

once you hit that top tax bracket, and are paying 47% in tax, suddenly being able to put invest some money into super and reduce the tax on it to only 30% and having future earning tax on it at 15% until it hits pension phase where it’s 0% tax starts to look very attractive. especially if you are 40+ so it’s not that many years until you can start To draw out of it.

It really is like a little tax haven you get to send funds to.

I also use an investment bond to limit tax on earnings to 30% on some money incase I need to draw some funds before I turn 60.

 

[darien44]

once you hit that top tax bracket, and are paying 47% in tax, suddenly being able to put invest some money into super and reduce the tax on it to only 30% and having future earning tax on it at 15% until it hits pension phase where it’s 0% tax starts to look very attractive. especially if you are 40+ so it’s not that many years until you can start To draw out of it.

It really is like a little tax haven you get to send funds to.

I also use an investment bond to limit tax on earnings to 30% on some money incase I need to draw some funds before I turn 60.

A discretionary trust with income streamed to a bucket company could also be a good option.

 

[Value Collector]

A discretionary trust with income streamed to a bucket company could also be a good option.

Yep, that can limit your Tax to around 30%, So its not as good as super, but slightly better than an investment bond due to being able to take advantage of Capital gains tax discount.The biggest draw back is the additional setup and running cost, and the paper work. But yes its a very good option probably not until you have maxed out your super though, and a couples super accounts can absorb about $220 K / year combined.

 

[sptrawler]

What do you mean?

why wouldn’t you want to make concessional contributions? that’s where you get the tax deduction.

Well have a think on my post and include the min _max comment.
Your the long term thinker.

 

[Value Collector]

Well have a think on my post and include the min _max comment.
Your the long term thinker.

Sorry, you might have to walk me through it a bit more, I am not sure what you mean, or what it has to do with concessional contributions.

 

[sptrawler]

Sorry, you might have to walk me through it a bit more, I am not sure what you mean, or what it has to do with concessional contributions.

There are concessional and non concessional contributions, each are treated differently and both are subject to different treatment.
It probably is nothing, just a thought bubble.