The SMSF Association has welcomed the government’s light touch on superannuation, but also highlighted a “surprise” measure announced by the treasurer.
From 1 January 2016, the level of income from defined benefit superannuation that can be excluded from the pension income test will be capped at 10 per cent, explained the SMSF Association.
The government estimates that around 65 per cent of income support recipients with payments from defined benefit superannuation have deductible amounts of 10 per cent or less, which is expected to raise $465 million over the forward estimates.
“This measure tightens a loophole which allowed superannuants with defined benefit superannuation to access the age pension, even when they had significant defined benefit income streams,” the SMSF Association stated.
“It will be interesting to see the detail of which defined benefit pensions will be impacted by this measure.”
Despite labelling the move surprising, the SMSF Association’s senior manager for technical and policy, Jordan George, told ifa sister title SMSF Adviser it will only affect a “very small” number of superannuants that have a defined benefit scheme from which they are receiving a defined benefit pension.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 20 Oct 2017Parliamentary insurance group formedBy Staff Reporter
- 20 Oct 2017Treasurer introduces BEAR legislationBy Aleks Vickovich
- 20 Oct 2017Westpac to refund $65m to customersBy Annie Kane
- 20 Oct 2017Survey tips independent takeoverBy Aleks Vickovich and Jessica Yun
- 18 Oct 2017AFA suffers budget blowoutBy Killian Plastow
- 18 Oct 2017ISA ups ante on governance lobbyingBy Aleks Vickovich
- view all