Govt sets $100,000 a year super threshold

[Terry_w]

If you have more than $2mil in super you will now lose tax concessions.

" Mr Swan announced that from July 1, 2014, future earnings (such as dividends and interest) on assets supporting income streams will be tax free only up to $100,000 a year. Earnings above $100,000 will be taxed at the same concessional rate of 15 per cent that applies to earnings in the accumulation phase."

http://www.smh.com.au/opinion/political-news/super-changes-to-hit-rich-retirees-20130405-2haim.html


Sounds fair to me.

 

[willair]

If you have more than $2mil in super you will now lose tax concessions.


http://www.smh.com.au/opinion/political-news/super-changes-to-hit-rich-retirees-20130405-2haim.html


Sounds fair to me.

Yes it does,, a executive in a private company or a senior public servant will now be on the same footpath,just makes a person wonder what will people like the above invest in??..

 

[geoffw]

Despite some pollies saying that somebody earning $250k pa was struggling, this sounds quite fair.

Even paying concessional rates above the threshold doesn't seen too onerous.

 

[spludgey]

Despite some pollies saying that somebody earning $250k pa was struggling, this sounds quite fair.

Idiots struggle with any money, irrespective of how much they earn.

 

[HotRod]

What about the small business owner who has busted his gut for years and sells his business into super and retires.

Still sound fair?

 

[MartinW]

I agree that 2M super might sound like a lot - but in 20-30 years time when it will likely apply more realistically to most people it might not actually be that outstanding. 100k pension sounds a lot but isn't really - most people are looking forward to what pension income they would like are aiming to hit 70-100k in current terms.

Maybe they will just punish some faceless bunch of wealthy people and stop there, index the threshold every year so by the time I get there it will all be just fine....

Unpopular changes are normally presented to hit some easy target eg 'the rich' - as a trojan horse. The big issue is they have broken the ice on changes in an area they pledged they wouldn't when enticing everyone into it. The bargain is meant to be to get people funding their own retirement and away from the state - the goverment said it would play a straight bat and not change the rules -as it is a locked in investment. Maybe there should be a get out clause that allows you to get your funds out if the rules are changed from the basis you originally invested.

From here it can be made to reach to lower income thresholds by changing the parameters according whatever budget squeeze that suits.

 

[Ausprop]

this is the trouble with super... tinker here, tinker there - you never know what they will do with it from one day to the next

 

[geoffw]

What about the small business owner who has busted his gut for years and sells his business into super and retires.

Still sound fair?

That's me.

I didn't actually need to sell it into super. There was $500k CGT free retirement benefit. Quite generous actually.

So under the new rules, I can earn $100k pa tax free. Anything over that is taxed at 15%.

That doesn't sound unfair.

There's still some very generous concessions.

Besides, anything done now is likely to be rolled back in about six months.

 

[dan c]

What about the small business owner who has busted his gut for years and sells his business into super and retires.

Still sound fair?

Yes it does. Because they have paid no (or very minimal) tax on the sale of their business, no tax on earnings on this money once the fund is in pension phase, and no tax on the withdrawals from the fund.

Originally, pension phase was tax free in the fund, because the pension payments were taxed in the hands of the recipient.

This changed in 2006, when any amount withdrawn once the retiree reached 60 was tax free.

Rather than introduce this $100,000 limit, they should have just changed it so that there was no difference between accumulation and pension phase. Tax all earnings in the fund at 15%.

 

[Angel]

Will this affect the MPs in their Super fund? Nothing about that on the ABC news.

 

[Terry_w]

What about the small business owner who has busted his gut for years and sells his business into super and retires.

Still sound fair?

Still sounds fair to me.

 

[HotRod]

Will this affect the MPs in their Super fund? Nothing about that on the ABC news.

What super fund?

It's all defined benefit (or at least for the longer serving MPs) and maybe VERY generous super for newer MPs, IIRC.

 

[dan c]

Will this affect the MPs in their Super fund? Nothing about that on the ABC news.

Apparently yes, it will. The change is to all funds, including defined benefit funds (which effects politicians and public servants.)

 

[Aaron Sice]

this is the trouble with super... tinker here, tinker there - you never know what they will do with it from one day to the next

which is why i will never invest through an SMSF again.

Pty Ltd the whole way.

 

[xactly]

Thin edge of the wedge.
Just wait till further fiddling, creep or inflation takes a piece out of the bottom line for years to come.

They have just taken an inch. Watch them take a mile.

 

[Rolf Latham]

would be half way sensible if the taxes thus raised were to support others specifically that have financial issues in retirement.

But we know that the $ raised will go back into GR and and x % will come back out

ce la vie

Super was and will always be a loaded gun

Folks forget that the 9 % employer contrib was to be matched by employer over time..............................

ta

rolf

 

[austini]

I think the changes are reasonably fair but one needs to consider all scenarios to gauge what impact it will have individually. Certainly selling lumpy assets such as property may push one over the $100,000 income threshold as capital gains are included from what I understand. However take note of the grandfathering situation for a decade. And those who have invested well and receive a yield well above 5% will be hit with the earnings tax well before they get to $2 Mil which is the magic figure being bandied arround.

View from Switzer:
Labor's super changes will hit more Australians than they claim

by Peter Switzer

Labor’s Super Changes are anti-wealthy and are anti-SMSFs.

Treasurer Wayne Swan says it will affect 20,000, but it will affect more. Listening to Swan and Superannuation Minister Bill Shorten was like dragging out a tooth as they spun out their messages.

Here are the changes:
1.A Council of Superannuation Custodians will be formed for future changes, and a policy with a Charter to assess any proposed changes will be created. (Big deal!)
2.Retirees’ earnings will be tax free up to $100,000 per annum.
3.As of 1 July 2014, future earnings over $100,000 will be taxed at 15 per cent — same as accumulation phase. (This is a big deal!)
4.There will be no change to tax in accumulation phase, so non-retirees will not be affected.
5.The $100,000 threshold will be indexed annually to the consumer price index (CPI) and will be adjusted in $10,000 hops.
6.Existing assets with a capital gains liability will only be affected by this measure 10 years after the introduction of the changes — that’s 1 July 2024. It will stop a lot of people selling a house inside a SMSF tax-free, but if you already have a house inside a SMSF, you have 11 years to sell it off. This is a big deal and is anti-SMSF.
7.Shorten says these changes affect only those with $2 million in their super account but that assumes you only make five per cent return. What if you have $1 million and you make 12 per cent? Then you would pay 15 per cent on $20,000, which is $3000.

These changes are anti-wealthy, anti-SMSF and anti-successful people, but who is surprised at that?

 

[Ausprop]

These changes are anti-wealthy, anti-SMSF and anti-successful people, but who is surprised at that?

wealth and success are not welcomed by this country - if you have money go elsewhere. australia is for overpaid unskilled labour, trades and welfare recipients.

 

[Mr. Fabulous]

Woah, you guys need to relax! This is proposed legislation, it hasn't been passed. With the Just Slightly To The Left of The Right Side faction of the Laberals pretty much certain to lose in the next election, it is unlikely these proposals will go through.

wealth and success are not welcomed by this country - if you have money go elsewhere. australia is for overpaid unskilled labour, trades and welfare recipients.

See ya! Don't let the door hit you on the bum on the way out. I don't want **** prints on my new door.

These changes are anti-wealthy, anti-SMSF and anti-successful people, but who is surprised at that?

It's not 'anti wealthy'. Very few wealthy people have their money in super.

It's not 'anti SMSF'. This will affect anyone drawing more than $100,000 p.a. from their super, regardless of where it is held. Besides, if you draw less than $100,000 (assuming your minimum is under 100K, then no wukkas).

It's not 'anti successful people'. That doesn't even make any sense. The Howard Govt introducing tax free income from super after 60 was a stupid move in the first place. Old people are a massive burden on taxpayers and it costs a lot of money to keep them alive. We should be making them contribute at least something to the expenditure.

If it was up to me, the tax free income idea would be abolished in its entirety and labelled as the cheap vote grab by a desperate garden gnome that it was.

 

[HiEquity]

I don't think income from any entity should be completely tax free - that's just a public policy train wreck waiting to happen in the long term. Governments need income to provide the services demanded by society. I accept that super should be tax advantaged - it has to be otherwise people (like me!) would never use it above the compulsory level because of the many restrictions they have on getting access to their own money. 10-15% seems like a good compromise with the current structure of super.

But then I also believe max income tax rates should top out at the level of company taxes (which should be 25% to be more internationally competitive) and the GST and carbon taxes should be increased to further broaden the tax base and make up the difference left behind by the lower income and company tax levels. The carbon tax should also use the same input tax credit system as the GST to remove distortions on our exports - ie it just turns into a carbon tax only on domestic consumption. And there should be an almighty crackdown on foreign tax shelter arrangements used by multinational companies...

Now, back to solving world peace...