Super changes 'fair'

It is not sustainable to continue to tax wealthy Australians' superannuation at the same level as everyone else's retirement savings, Superannuation Minister Bill Shorten (pictured) says. A proposal announced by Treasurer Wayne Swan on Friday is for super pensions and annuities earnings greater than $100,000 to be taxed at 15 per cent, instead of being tax free.

By InvestSMART · 8 Apr 2013

By InvestSMART ·
8 Apr 2013

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Frequently Asked Questions about this Article…

What is the proposed change to superannuation tax on pensions and annuities?

Treasurer Wayne Swan has proposed that earnings from super pensions and annuities greater than $100,000 should be taxed at 15% instead of being tax free.

Who announced the superannuation tax proposal and who commented on it?

The proposal was announced by Treasurer Wayne Swan, and Superannuation Minister Bill Shorten commented that it is not sustainable to continue taxing wealthy Australians' super at the same level as everyone else's retirement savings.

Which retirees or accounts would be affected by the $100,000 superannuation threshold?

According to the proposal, only super pension and annuity earnings that exceed $100,000 would be subject to the new 15% tax, so retirees with earnings above that threshold would be affected.

Why is the government proposing a 15% tax on high superannuation pension and annuity earnings?

The government’s stated rationale, as quoted by Superannuation Minister Bill Shorten, is that it is not sustainable to continue taxing wealthy Australians' superannuation at the same level as other retirement savings—hence the proposal to tax earnings over $100,000.

Would all superannuation income become taxable under the proposal?

No. The proposal targets super pension and annuity earnings above $100,000, which would be taxed at 15% instead of being tax free; it does not say all super income would be taxed.

How does the proposed 15% tax compare with the current tax treatment of super pensions and annuities?

Under current treatment described in the article, those pension and annuity earnings are tax free; the proposal would change that for earnings over $100,000 by imposing a 15% tax.

Is the 15% tax on super pension and annuity earnings over $100,000 already law?

No — the change is a proposal announced by Treasurer Wayne Swan, not a confirmed or enacted law according to the article.

How can everyday investors stay informed about this proposed superannuation tax change?

Everyday investors can follow official government announcements and reputable news coverage of the proposal—like this report—to track developments and any decisions about implementation.