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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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JOHN C
JOHN C from NSW commented:

Labour stuffed up the country.Get over it,move on, and stop this inane whinging. Take control of your own lives. Jon Sydney 

John
John from QLD commented:

Well, if you voted the Libs in, what else did you expect? The rich (like young Clive and Gina) get richer and the poor (who were counting on Super to support their retirement) get poorer! Watch this space, there's more to come (or go!) 

Vicki
Vicki from QLD commented:

Don't politians get 14%. It would be nice if they all lived by the the rules they want the taxpayer to live by. Get rid of their perks and junkets and perhaps you could take them seriously. 

Robyn
Robyn from NSW commented:

OMG! You want someone else to do your work for you. I don't see the problem. Ask your Paymaster to add to your super. What's the big deal? It's always been your money - your responsibility. Increase it yourself.... 

Roslyn
Roslyn from QLD commented:

Your kidding yourself, read your own words. 

Richard
Richard from NSW commented:

To all those wingers out there not all super money comes from business. Most companies to-day decide on an annual wage increase of say 3.5% but only pay out 2.5% or 3% so you miss out on the full amount as the company uses the difference to pay your Super. Now you will get the full amount so don't blow it put your own money into Super and watch it grow. If you don't know the age of entitlement is over you had better wake up, a little sacrifice now will make a big difference in the future. Ric from NSW. 

Allan
Allan from NSW commented:

What do you expect. We have a Liberal/National Government in power. Remember all the 2GB presenters and Rupert Murdoch via The Daily Telegraph told you all who to vote for and that's what you did. You should love this change to the levy and thank Tony, Joe & Clive for this. Also, it was another Tony Abbott lie wasn't it? 

warren
warren from NSW replied to Allan:

I’ll lose no sleep over this non-event. The scheduled SG increases just moved out over a few more years. So what’s the problem? Better than having $9B ripped out of the Super system as Rudd/Gilliard/Rudd did after promising they would not touch superannuation – quote ‘Not one jot, not one tittle’, and then Bill Shorten put through 9 or so legislative/regulative changes. 

Peter
Peter from NSW commented:

I will simply get my employer to do a before tax deduction from my wage to my super fund so I only pay 15% tax on the money to make up the reduction to SG. 

Helen
Helen from QLD commented:

If we will have more money in our pockets in the short term, I suggest we put that money into our super! Perhaps we all need to stop whinging and take responsibility for our retirement, instead of always playing the blame game! 

neil
neil from NSW commented:

I joined a superfund back in 74 and contributed 6% of my wage until I retired last year as I was warned back then that the pension would not cover all my needs I am now in a position for my wife and I to enjoy our retirement. I feel we all have to take some responsibility for our well being later in life and not rely on others or governments to look after us. The secret is not to be greedy and chase the easy dollar and make sure you have a good fund/manager and if you have time do it yourself as they say nobody looks after your money like you do 

James e
James e from NSW replied to neil:

Suggest you have a look at Myagedcare.gov.au The government ends up taking most of your assets off you any way We are spnding ours 

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