Su­per is the great Aussie tax dodge


SU­PER­AN­NU­A­TION has never been seen as sexy, and its pop­u­lar­ity is un­der a cloud amid gov­ern­ment rule changes.

How­ever, this $2.6 tril­lion pile of wealth that col­lects at least 9.5 per cent of the wages of most work­ers re­mains Aus­tralia’s big­gest tax dodge, fi­nan­cial plan­ners say.

Dodg­ing tax is not tax eva­sion – which is il­le­gal – but sim­ply min­imis­ing how much of your money the gov­ern­ment gets, says au­thor and cer­ti­fied fi­nan­cial plan­ner

Pa­trick Can­ion.

“It’s al­most your pa­tri­otic duty to min­imise your tax legally, un­less you think politi­cians are bet­ter at spend­ing your money than you are,” he said.

“If you be­lieve that, then pay as much tax as you can.”

Mr Can­ion said the 15 per cent tax rate on money paid in by em­ploy­ers, salary sacri­fice and other per­sonal con­tri­bu­tions was well be­low the 21-49 per cent tax most peo­ple paid on their in­come.

Once re­tired, your tax rate is typ­i­cally zero on earn­ings, cap­i­tal gains and with­drawals. “That is a re­ally big re­ward – it’s say­ing thank you for hang­ing in there, pro­vid­ing for your­self and not re­ly­ing on the tax­payer,” Mr Can­ion said.

Self-man­aged su­per funds have been used by wealthy Aus­tralians to dodge tax for years, which is why the Fed­eral Gov­ern­ment last July capped the amount held in a retiree’s su­per pen­sion at $1.6 mil­lion.

SMSF As­so­ci­a­tion head of pol­icy Jor­dan Ge­orge said su­per re­mained a tax­ef­fec­tive

sav­ings ve­hi­cle de­spite the chang­ing rules. “Be­fore re­tire­ment all earn­ings in su­per are taxed at 15 per cent. This is be­low most peo­ple’s mar­ginal tax rates and lower than most other in­vest­ments,” he said.

“Once re­tired, your earn­ings on su­per­an­nu­a­tion as­sets are tax-free on the first $1.6 mil­lion you have in sav­ings. Over this amount earn­ings are taxed at the low-rate of 15 per cent.”

“You can still make up to $25,000 in pre-tax con­tri­bu­tions… and up to $100,000 in post-tax con­tri­bu­tions per year,” Mr Ge­orge said.

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