WHO’S HIT BY LA­BOR SU­PER CHANGES

The Weekend Australian - - THE NATION -

Plan to abol­ish con­ces­sional catch-up con­tri­bu­tions

A mother takes four years’ leave with­out pay to raise her fam­ily and makes no su­per con­tri­bu­tions dur­ing this time. Un­der the ex­ist­ing scheme she could con­trib­ute $30,000 to her su­per for each year she missed. Trea­sury es­ti­mates that would make her su­per bal­ance at re­tire­ment age $311,000 higher. The gov­ern­ment ar­gues un­der La­bor she would be $311,000 worse off.

Plan to re­verse de­ductibil­ity for per­sonal su­per con­tri­bu­tions

A 20-year-old starts a small busi­ness and sep­a­rately works part-time in an ac­count­ing firm to pay him­self a salary, with a com­bined an­nual in­come of $90,000. He con­trib­utes $15,000 to his su­per bal­ance each year over 10 years and can claim a de­duc­tion on this, mak­ing the tax on his in­come $2925 lower each year over the decade. If he tipped that money into his su­per at re­tire­ment he would be about $105,000 bet­ter off. He would not qual­ify for the de­duc­tion un­der La­bor’s pro­posal.

Plan to lower non-con­ces­sional con­tri­bu­tions cap from $100,000 to $75,000

A woman sells the fam­ily home at age 45 and puts $300,000 — the max­i­mum al­lowed un­der the ex­ist­ing scheme — into su­per. At re­tire­ment, her su­per bal­ance would be about $641,000 higher. Un­der La­bor’s pol­icy she could con­trib­ute only $225,000 from the house sale, mak­ing her su­per bal­ance $160,000 lower at re­tire­ment com­pared to the gov­ern­ment’s pol­icy.

Plan to re­duce high-in­come su­per con­tri­bu­tion thresh­old from $250,000 to $200,000

A man con­trib­utes $25,000 — the max­i­mum amount of con­ces­sional con­tri­bu­tions — to su­per each year. If his con­tri­bu­tions are sub­ject to the full amount of the higher-in­come su­per charge un­der La­bor’s plan, which would set the thresh­old at $200,000 (down from $250,000), he will have about $121,000 less in his su­per bal­ance af­ter 20 years.

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