It has been a year since stricter asset tests for the age pension came into force — overshadowed by a flurry of changes to superannuation that hit mid-year.
But the longer-term financial impact on those affected is now becoming more apparent.
The Self-Managed Superannuation Fund Association threw a spotlight on the issue yesterday.
In a statement, chief executive John Maroney said it was now apparent that the changes to the means test taper rates and thresholds have had “significantly adverse and presumably unintended consequences”.
He said the steeper taper rate that took effect from January 1 last year is now actively discouraging middle-income wage earners from saving to be self-sufficient in retirement.
Maroney argues that the changes have created a “black hole” for people directly affected by the changes that makes them worse off in terms of income — encouraging them to spend up (or cut back on their savings) to reduce their assets to qualify for the pension. He cites the example of a home-owning couple who have a superannuation balance of between $500,000 and $800,000.
Wednesday, May 16, 2018
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