Proposed Top-up for Retirees With Low Superannuation

News

Proposed Top-up for Retirees With Low Superannuation

Are you?	- A retiree or a person considering retirement?
At a glance:	- A proposal is currently being reviewed by the Henry Tax Review panel to help boost income streams of retirees with low superannuation.
You should:	- Be aware of the proposal to boost income streams for retirees with low superannuation. - Contact us if you require any clarification or advice.

1.	The Government is concerned that many self funded retirees relying on account based pensions may live longer than they expect and run out of money in their old age.
2.	Under a new proposal, which is currently being examined by the Henry Tax review panel, low income earners retiring with small superannuation lump sums would be given the option of paying the money to the Government in return for guaranteed income payments indexed to the age pension.
3.	Under the proposal, a retiree with $100,000 in their superannuation fund would receive a means-tested age pension plus a top-up worth 20% of the age pension.
4.	The proposal is a result of the fall in lifetime annuity products being offered on the market.
5.	The proposal highlights that if someone with a lump sum of $60,000 could buy a top-up to the age pension from the Government, it may provide an extra guaranteed $2,000 a year over their lifetime.
	- Their spouse's separate net income was more than $8,918 or,
	- The taxpayer's taxable income was greater than $150,000.
6.	The proposal has been backed by industry superannuation funds and the Australian Council of Trade Unions.