Super reforms benefit older workers
The government is promoting the next wave of superannuation reforms which will boost retirement savings of older working Australians but COTA says more improvements are needed to bolster seniors’ super accounts.
By Natasha Egan
The government is promoting the next wave of superannuation reforms which will boost retirement savings of older working Australians.
From July 1, the upper age limit for compulsory super will be removed and the super guarantee will increase to 9.25 per cent as it begins its gradual increase from 9 to 12 per cent over seven years.
Australian Taxation Office (ATO) research shows many workers over the age of 50 won’t retire with enough money to live comfortably, the ATO reports.
“In total, the reforms will increase Australian’s super savings by $550 billion by 2036, with older Australians not missing out on the benefits, including the gradual rise in the super guarantee over the next seven years,” the ATO said in a statement.
The latest changes follow other reforms made last year including the low income super contribution and changes to the contributions cap.
The $50,000 transitional cap for people aged 50 ceased in June 30 last year. The before tax contributions cap is now $25,000.
While the improvements are welcomed, chief executive of seniors advocacy group COTA, Ian Yates, said some of last year’s changes are not and more is needed to bolster the superannuation contributions of older Australians.
“We’ve advocated for age limit to be removed for years,” Mr Yates said.
“We were exceptionally pleased when they announced it. There’s no justification for why someone who is working shouldn’t receive super.”
Likewise COTA supports the super guarantee increase but Mr Yates said should happen faster than it is.
“There is a range of other measures needed to bolster super contributions for older Australians because the current levels of super are inadequate,” Mr Yates said.
“The main tax advantages are for people with a higher income. There needs to be more incentives for people on low and middle incomes.
“We’ve been critical of the move in the last budget to reduce the contributions limit. We’ve advocated in this year’s budget submission to have this addressed.”
The low income contribution was introduced in July and provides a super contribution up to $500 per year for eligible workers earning up to $37,000 annually.
Deputy Commissioner for Superannuation Alison Lendon said mature workers need to ensure they have provided their tax file number to their super fund to receive the low income super contribution.
“The ATO will work out their eligibility using contributions information from their super fund, along with other information we collect and make the payment to their fund,” Ms Lendon said.
Providing your tax file number to your super fund is one of the best ways to avoid having lost super, the ATO said.
The ATO’s online tool, SuperSeeker, allows users to find any lost super reported to the ATO. It can also be used to see details of super contributions made in the last two financial years and to make an online request a transfer of funds between super accounts.
Useful links
The ATO YouTube channel has videos about changes to super for different life stages including:
• Over 50s; and
• Over 60s
