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NewsCuts to Super: what they could mean for you
Cuts to Super: what they could mean for you

Cuts to Super: what they could mean for you

Tags: Cost of Living Superannuation
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100271122-broken-nest-egg-gettyp.600x400Some Australian workers aged over 50 will be $20,000 or more worse off after an unexpected deal between the Government, the Palmer United Party and crossbench Senators.

The last-minute deal on Tuesday night means the planned increases to compulsory superannuation contributions from 9 to 12 per cent have been delayed by 6 years.

If you’re still working, your Super contributions now won’t rise again until 2021.

3.6 million low-income workers, including over 2 million women, will be further hit, as they will also lose $500 per year when the Low Income Superannuation Contribution is abolished in 2017.

So what’s changed?

The amount of money employers are required to contribute to Superannuation has slowly been increasing from 9 to 12%.

Since July 1 this year, employers have been required to pay a minimum of 9.5% of earnings into superannuation. The minimum amount of superannuation contributions your employer had to pay would’ve increased to 12 per cent by 2019.

The Government’s deal with the Palmer United Party means the increases will be delayed and won’t reach 12 per cent until 2025.

According to research by Industry Super Australia (ISA), for a 50-year-old on $100,000 a year, it will mean almost $20,000 less in contributions by the retirement age of 67.

What about the Low Income Superannuation Contribution?

Australian workers who earn up to $37,000 get a tax rebate known as the Low Income Superannuation Contribution (LISC).

This means the Government pays up to $500 each year into the superannuation accounts of low-income earners to help them save for their retirement.

Under the new deal this contribution will be abolished.

The abolition of the LISC is particular unfair to women, as they make up two-thirds of the 3.6 million lowest paid workers.

The deal was struck so that the Government could abolish the mining tax, and the crossbench Senators such as Clive Palmer could save the Schoolkids Bonus, as this story explains.

The Government argues we will have more money in our pockets in the short-term even if we have less to retire on. What do you think?

Originally posted on .

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Cuts to Super: what they could mean for you

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MERILYN
MERILYN from NSW commented:

Why should only the employer be responsible for Superannuation? Employees can always make their own contributions into their Super. Stop draining the small businesses. 

Tim
Tim from NSW commented:

Clive Palmer is NOT a cross-bench Senator, regardless of what he might think 

Roberta
Roberta from NSW commented:

I understand some people would be upset but you know what, would it be such a bad think if we all took responsibility for our own super and put away those "lost" dollars ourselves by making a pre-tax contribution? Wouldn't that work just as well? 

Gail
Gail from NSW commented:

So, what's stopping us from opening an account ourselves? We can open a super account with State Super or we can save $1000 or so and put it in bonds. I agree that we MUST take responsibility for ourselves. We already rely too much on Government handouts and suing people and our employers. Australians are know as self-reliant - I can't help but wonder. Gail 

Nigel
Nigel from NSW commented:

This is a rather shallow and unbalanced article. I would expect the FiftyUp club to provide a complete picture of the impact on Australia and Australians. 

Jeanette
Jeanette from NSW commented:

Well it is the employer who pays this levy and was only a further strain on business. Why not try and contribute to your own super instead of expecting business to do it for you. A good decision especially for small business 

Steven
Steven from NSW commented:

The changes impact on the employer not the government. We have many companies who are employers going to the wall and many relocating overseas where they don't have to pay all these monies. Do we want jobs? I want jobs for my kids! Look what Gillard did. I would love higher contributions but I have a stronger preference for jobs and for those jobs to stay here in Australia! 

warren
warren from NSW commented:

Unfortunately only quoting from the Union controlled ISA does not provide for balanced input, as it has too many vested interests. 

Rob
Rob from NSW commented:

I think you should get someone to argue the other side. It feels to me like you are pushing only one agenda, but there is another side to the argument and if you were fair dinkum, you would give that balance then let us decide. Instead you make up a petition that gives only one choice- that choice is yours not necessarily mine or others. So, yes I don't have to sign the petition, but that is not really the point! 

Nathalie
Nathalie from NSW commented:

As usual the general mature working population is worse off - the mining tax cuts benefitted Clive Palmer and his own business/es. Anyone 50+ gets the raw deal....again !!! 

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