• Skip to content
  • Skip to primary sidebar
  • Skip to footer

SuperGuide

Simple superannuation and retirement planning information

  • SuperGuide Premium
  • About SuperGuide
  • Log in

Retirementgate revisited: Australian couples and singles punished for saving

July 20, 2017 by Trish Power 20 Comments

Contents

  • Age Pension (and super) changes may determine next federal election
  • Retirement savings ‘sweet spot’ for singles and couples
  • 1. Homeowning couple: $400,000 savings sweet spot
  • 2. Non-homeowning couple: $650,000 savings sweet spot
  • 3. Homeowning single person: $300,000 savings sweet spot
  • 4. Non-homeowning single person: $550,000 savings sweet spot
  • Table: Retirement savings sweet spot for couples and single people
  • General conclusions (from Save Our Super)
  • Assumptions used in table, chart and analysis

Note: This article discloses the retirement savings ‘sweet spot’ (optimal super balance for securing maximum income when combining super and Age Pension payments) for 4 categories of Australians – homeowning couple, homeowning single person, non-homeowner couple, non-homeowner single person. See summary table, charts and explanatory text later in the article.

In June 2017, we reported on disturbing findings from a paper originally produced for SuperGuide, by advocacy group, Save Our Super. The predominant finding from the paper was, that due to the harsh January 2017 changes to the Age Pension assets test, many Australians would be financially better off accumulating savings only up to a certain level, and then relying more on the Age Pension.


Quoting from our June 2017 SuperGuide article Treasurer Morrison’s ‘Retirementgate’ encourages Aussies to spend and take Age Pension: “For a retired couple who own their home, the practical effect of the 2017 Age Pension changes is that you receive more total retirement income (including Age Pension) with $400,000 in super, than you do with $800,000 in super, or even $1 million in super. Under the new rules, the most desirable savings targets are $400,000 or $1,050,000, and to accumulate over this $650,000 divide using the post-July 2017 concessional contributions limits would take 26 years.”

At SuperGuide, we have named this policy debacle as ‘Retirementgate’. In short, the retirement savings ‘sweet spot’ is $400,000, OR more than $1 million, for a retired home-owning couple, and nothing in between, due to the effect of the harsher Age Pension assets test. (Since 1 January 2017, retirees have lost $3 of Age Pension a fortnight for every $1,000 over a certain assets threshold, compared with only losing $1.50 of Age Pension for every $1,000 over the threshold before January 2017.)

Australian couples with more than $400,000 in retirement savings are effectively taxed at 150% for lifetime super savings between $400,000 and $800,000, according to the Save Our Super paper.

The long-term effects of this astounding finding from the Save Our Super paper, is that there are now incentives for Australians to change their saving behaviour by relying persistently on a significant part Age Pension. According to Save Our Super, such a change in behaviour will reverse over time the government’s claimed budget improvements, and damage the sustainability of the retirement income structure. By crimping Australians’ aspirations to achieve rising real living standards in retirement, the long-term effects of these measures will necessitate further change to policy. Save Our Super believes this uncertainty is a threat to the retirement planning of millions of Australians.

In our three SuperGuide articles (published in June 2017) covering this important paper, we provided an illustration of this issue from the perspective of a retired couple who owned their home. We have had a huge reaction from SuperGuide readers and also from the broader media, including questions about whether there were comparable retirement savings ‘sweet spots’ for single people, and for retirees who do not own their homes.

Thanks to Save Our Super and its use of Sean Corbett’s financial modelling, we can also illustrate the scenarios for single people and non-homeowning retirees. See later in this article for a summary table, charts, and explanatory text disclosing the savings ‘sweet spot’ for 4 categories of retirees.

Age Pension (and super) changes may determine next federal election

I am sure I am not the only one wondering what type of government would introduce a policy that financially penalises Australians for saving for retirement. Ironically, as Save Our Super highlights, the policy that commenced in January 2017 is not a bold new policy experiment: rather, it is a return to a policy that was a tried and proven failure before the 2007 Simplified Superannuation reforms. The government’s action or inaction in correcting this issue will undoubtedly have a significant influence on the next federal election.

An important point to remember is that this measure would not have got through parliament without the support of the Greens. Although the Greens may have environmental credentials, I very much doubt the infamous decision to vote through the harsher Age Pension assets test without sighting long-term modelling will be hailed as one of their finest political moments.

As Save Our Super has argued, the impact of policy change on the federal budget and on retirement living standards is inescapably a long-term issue requiring examination over a time horizon of 40 or more years. According to Save Our Super, such modelling was published for the 2007 reforms (introduction of tax-free super and removal of benefit limits), but has not been forthcoming for the 2017 changes.

In SuperGuide’s view, the introduction of the 2017 measures without long-term modelling of the impact of such measures, is an expensive mistake, and needs to be seriously reconsidered. Although reversing or modifying the Age Pension assets test changes may cause short-term embarrassment for policy makers and political leaders, such action I suspect is better than being voted out of government, or losing your job.

See the next section for a summary table, charts and explanatory text disclosing the savings ‘sweet spot’ for 4 categories of retirees.

Note: For background information on how this policy debacle, Retirementgate, plays out, see the following SuperGuide articles:

  • Treasurer Morrison’s ‘Retirementgate’ encourages Aussies to spend and take Age Pension
  • Retirement income and savings trap: 13 findings from Save Our Super’s paper
  • Retirement income and savings trap caused by Coalition’s 2017 superannuation and Age Pension changes

Retirement savings ‘sweet spot’ for singles and couples

In response to many requests for more information on the financial implications of the harsher Age Pension assets test on current and future retirees, the authors of the original paper, Jack Hammond QC and Terrence (Terry) O’Brien (former Treasury official), with the assistance of Sean Corbett’s modelling, have kindly compiled further analysis for the following four categories of retirees:

  • Couple, homeowners
  • Couple, non-homeowners
  • Single person, homeowner
  • Single person, non-homeowner

The explanatory text, table and charts below illustrate the savaging of retirement incomes, and the dismantling of long-term retirement income policy by the current government.

The assumptions used in the table, charts and analysis below appear at the end of the article. Note that Chart 1 (see later in the article) reflects the corresponding retirement balances appearing in Charts 2 to 5. For example, Case 6 ($400,000 super balance) in Chart 1, is the super balance for Case 6 in Charts 2 to 5.

Note: Save Our Super has made it clear that the organisation is not arguing that individuals should limit their lifetime saving: “We are simply observing that because perverse incentives have been created by the Government’s 2017 policy changes, some people will, in practice, quite logically follow those incentives to limit their savings assessable under the Age Pension assets test. This only needs to happen at the margin to create problems for sustainability of the Age Pension and for the policy framework determining the interaction between the Age Pension and the superannuation system”.

1. Homeowning couple: $400,000 savings sweet spot

Although analysis for homeowning retired couples has been provided in previous articles, for completeness and for convenience we include a summary of this analysis in this article.

According to Save Our Super, incentives created by the federal government, now encourage Australians to self-limit lifetime retirement savings: a homeowning couple is encouraged to self-limit savings assessable under the Age Pension assets test to $400,000, which will enable the optimum use of the Age Pension. With $400,000 in super, a homeowning couple can receive 94% of the full Age Pension, delivering a total income of $52,395 (based on September 2016 Age Pension rates). Under the harsher Age Pension assets test, regardless of whether a homeowning couple saved $600,000 or $800,000 or even $1 million, they cannot secure more than $52,395 until they have $1,050,000 in super and are relying solely on their super savings. A homeowning couple are hardest hit when they hold $800,000 in super, and at this level of savings they receive less total income (super pension income and Age Pension payments), compared with a similar couple holding only $400,000 in super. See table below.

2. Non-homeowning couple: $650,000 savings sweet spot

According to Save Our Super, incentives created by the federal government, now encourage Australians to self-limit lifetime retirement savings:  a non-homeowning couple is encouraged to self-limit savings assessable under the Age Pension assets test to $650,000, which will enable the optimum use of the Age Pension. With $650,000 in super, a non-homeowning couple can receive 82% of the full Age Pension, delivering a total income of $60,833 (based on September 2016 Age Pension rates). Under the harsher Age Pension assets test, regardless of whether a non-homeowning couple saved $800,000, or $900,000, or even $1 million, they cannot secure more than $60,833 until they have $1,250,000 in super and are relying solely on their super savings. A non- homeowning couple are hardest hit when they hold $1,000,000 in super, and at this level of savings they receive less total income (super pension income and Age Pension payments), compared with a similar couple holding $650,000 in super. See table below.

3. Homeowning single person: $300,000 savings sweet spot

According to Save Our Super, incentives created by the federal government, now encourage Australians to self-limit lifetime retirement savings: a homeowning single person is encouraged to self-limit savings assessable under the Age Pension assets test to $300,000, which will enable the optimum use of the Age Pension. With $300,000 in super, a homeowning single person can receive 83% of the full Age Pension, delivering a total income of $33,958 (based on September 2016 Age Pension rates). Under the new Age Pension rules, regardless of whether a homeowning single person saved $400,000 or $500,000 or even $600,000, they cannot secure more than $33,958 until they have $700,000 in super and are relying solely on their super savings. A homeowning single person is hardest hit when they hold $550,000 in super, and at this level of savings they receive less total income (super pension and Age Pension payments), compared with a similar single person holding $300,000 in super. See table below.

4. Non-homeowning single person: $550,000 savings sweet spot

According to Save Our Super, incentives created by the federal government, now encourage Australians to self-limit lifetime retirement savings: a non- homeowning single person is encouraged to self-limit savings assessable under the Age Pension assets test to $550,000, which will enable the optimum use of the Age Pension. With $550,000 in super, a single person who doesn’t own their home, can receive 66% of the full Age Pension, delivering a total income of $42,549 (based on September 2016 Age Pension rates). Under the new Age Pension rules, regardless of whether a non-homeowning single person saved $400,000 or $500,000 or even $600,000, they cannot secure more than $33,958 until they have $900,000 in super and are relying solely on their super savings. A non-homeowning single person is hardest hit when they hold $750,000 in super, and at this level of savings they receive less total income (super pension and Age Pension payments), compared with a similar single person holding $550,000 in super. See table below.

Table: Retirement savings sweet spot for couples and single people

   Maximum Age Pension (rates as at September 2016) “Sweet spot” (maximum combined income from Age Pension and super drawdown) “The Pits” (trough in total income)  “Ahead at last” (super balance at which 5% drawdown  overwhelms loss of part Age Pension)  Width of savings trap
Maximum part pension plus 5% super drawdown Super balance at sweet spot (to nearest $50,000) Part pension as proportion of total pension Total income Corresponding super balance Corresponding super balance to super draw down of 5%
Couple, homeowners (Chart 2) $34,477 $52,395

(Case 6)

$400,000 94% $41,251

(Case 14)

$800,000 $1,050,000

(Case 19)

$650,000
Couple, not homeowners (Chart 3) $34,477 $60,833

(Case 11)

$650,000 82% $51,251

(Case 18)

$1,000,000 $1,250,000

(Case 23)

$600,000
Single, homeowner (Chart 4) $22,867 $33,958

(Case 4)

$300,000 83% $27,500

(Case 9)

$550,000 $700,000

(Case 12)

$400,000
Single, not homeowner (Chart 5) $22,867 $42,549

(Case 9)

$550,000 66% $37,500

(Case 13)

$750,000 $900,000

(Case 16)

$350,000

Disclaimer: The calculations illustrate the general rules on how the Age Pension income and assets tests apply to different levels of superannuation savings. The table, charts or analysis is not to be construed as advice to any particular retiree. Individuals should seek specialist financial advice on their particular circumstances.

General conclusions (from Save Our Super)

According to Save Our Super, there is a wide ‘savings trap’ in all 4 cases — between $350,000 for a single non-homeowner and up to $650,000 for a couple who own their own home (see Charts 1 to 5 below). In all 4 scenarios, there is an incentive to plan for a retirement strategy based on a substantial part Age Pension, ranging between 66% for a single non-homeowner to 94% for a couple owning their own home. For all 4 scenarios, much greater super saving can generate a significantly smaller total retirement income than the ‘sweet spot’ strategy.

Note: According to Save Our Super, a couple who own their own home face the largest perverse incentive in absolute terms, where doubling the amount saved by $400,000 can reduce total annual income by roughly $11,000.

Save Our Super explains that the savings traps differ for the 4 scenarios due to the fact that individuals eligible for the full Age Pension get the same Age Pension payment regardless of whether they are homeowners or not. Save Our Super says: “Couples eligible for the full Age Pension each receive a lesser pension payment than an individual, also regardless of whether they are homeowners or not. As a couple, they receive more than an individual, but not twice as much. The Age Pension assets test allows more assets to a non-homeowner than to a homeowner before it starts to reduce access to the full Age Pension. It allows the same margin of higher assets (just over $200,000) to both individuals and couples.  (The amount of extra assets it allows the non-homeowner appears less than the value of a typical home for either a single pension or a couple in many urban markets.) The interaction of these two factors — different payments per person for single individuals and each individual in a couple, plus different assets test allowances according to home-ownership status — drive the differences in sweet spots and the width of the savings traps across the four household types.”

Chart 1: 25 illustrative superannuation balances on retirement at age 65Retirementgate revisited: Australian couples and singles punished for saving - chart 1a 640x200

Click on the image to see a larger version

Chart 2: Retired couple age 65-74, homeowners

Retirementgate revisited: Australian couples and singles punished for saving - chart 2 a 640x256

Click on the image to see a larger version

Chart 3: Retired couple age 65-74, not homeowners

Retirementgate revisited: Australian couples and singles punished for saving - chart 3a 640x256

Click on the image to see a larger version

Chart 4: Single retiree age 65-74, homeowner

Retirementgate revisited: Australian couples and singles punished for saving - chart 4a 640x256

Click on the image to see a larger version

Chart 5: Single retiree age 65-74, not homeowner

Retirementgate revisited: Australian couples and singles punished for saving - chart 5a 640x256

Click on the image to see a larger version

Assumptions used in table, chart and analysis

The authors of the table and charts above have drawn up the scenarios using the same assumptions that are used in the Retirementgate articles explaining the implications of the harsher Age Pension assets test for a couple who are homeowners (see list of articles after this section). These assumptions are:

  • Age Pension rates are those as at September 2016.
  • A persons’ assets-testable savings are treated as being wholly in superannuation (i.e. no ‘personal use’ assets).
  • Superannuation drawdown is assumed to be the minimum required: 5% per annum applying for retirees between the ages of 65 and 74.
  • The results are reported to the nearest $50,000 in savings: charts above use savings increments/superannuation balances in steps of $50,000, which means the precise ‘sweet spot’ might fall somewhere between such increments.
  • The table uses the same terminology as appears in article, (Retirement income and savings trap caused by Coalition’s 2017 superannuation and Age Pension changes).
  • The table refers to ‘cases’ which are the numbered examples of superannuation balances in Chart 1, and Charts 2 to 5 illustrate these cases for the 4 scenarios. In Chart 2, Save Our Super refers to the ‘sweet spot’ of maximised part Age Pension plus superannuation drawdown; the pits’ which is the trough of lower income from elimination or near-elimination of the part Age Pension plus higher drawdown from considerably higher superannuation saving; and finally ‘ahead at last’, the point at which drawdown from much higher superannuation savings rises above the combined Age Pension plus superannuation drawdown at the ‘sweet spot’.

For more information on Retirementgate, see the following SuperGuide articles:

  • Treasurer Morrison’s ‘Retirementgate’ encourages Aussies to spend and take Age Pension
  • Retirement income and savings trap: 13 findings from Save Our Super’s paper
  • Retirement income and savings trap caused by Coalition’s 2017 superannuation and Age Pension changes

For information on how the Age Pension rules work, see the following SuperGuide articles:

  • Latest Age Pension rates (since September 2018)
  • Australian Age Pension: Am I eligible and how do I apply?
  • Age Pension: 300,000 Australians lost entitlements on 1 January 2017
  • Less Age Pension, and paid to fewer Australians since January 2017

Related articles

  • Retirementgate revisited: Australian couples and singles punished for saving - retirement age reckoner 200x150
    Retirement Age Reckoner: Discover your preservation age and Age Pension age
    September 18, 2018
  • Retirementgate revisited: Australian couples and singles punished for saving - Pixmac000082890327 abacus 200x150
    Age Pension: Is my super benefit counted towards the assets test, or income test?
    January 18, 2018
  • Retirementgate revisited: Australian couples and singles punished for saving - middle australia 40324059 c 200x150
    Retirementgate: Government’s Age Pension debacle hits middle Australia
    November 21, 2017

Related sections

How super works Planning for retirement SMSFs (Self-managed super funds) Super and tax THE SOAPBOX

Related topics

Age Pension Federal Budget and superannuation How much super do I need? Making superannuation contributions Retirement strategies Retirementgate Superannuation benefit payments tax Superannuation strategies Taking a super pension Tax-free super

IMPORTANT: SuperGuide does not provide financial advice. All information on SuperGuide.com.au is intended only as a guide. It is important to seek professional accredited financial advice when considering whether the information is suitable to your personal circumstances. Comments provided by readers that may include information relating to tax, superannuation or other rules cannot be relied upon as advice. SuperGuide does not verify the information provided within comments from readers. Learn more

Reader Interactions

Comments

  1. Chris says

    July 31, 2017 at 11:57 am

    I think Super is going to continue to be a big problem until we address 2 issues.

    Point 1: Any super rule changes have to be announced “and locked in” 3 years before they take effect. Super and most investing are based on long term planning, time to put things in place and then many many years of saving in a certain way to achieve your Goal… only to find when your nearly there – someone has moved the Goal Posts!

    Point 2 : When are going to have one set of super rules that apply to everybody equally in this country. Everybody including Public Servants, Judges etc and Politicians should have to give up their guaranteed benefit super schemes and move onto accumulation Funds, where they personally feel the impact of any “rule changes”.
    Trish ? or anybody, do we know how many millions in capital would it take to support the pension of an average senior Public Servant, a retired Judge, Backbencher’s Super pension let alone an ex PM’s penion ?

    Ex long term Liberal voter

    Reply
  2. Fred says

    July 30, 2017 at 4:25 pm

    I have to bring to your attention some anomalies in the article. Not withstanding your explanation of the method used to i.e all assets are show as superannuation.
    There are a number of issues with this scenarios . We are over the present asset benchmark of $827000 and therefore do not receive any pension or other benefits associated with the pension. However these assets are not all superannuation being super, bank, shares, car, household effects, etc. as a consequence this precludes the use of the so called sweet spot because to come down to the $400.000 benchmark you suggest would not
    be so simple as it is suggested because the amount in super would not give the 5% drawdown amount you suggest. The remaining monies would not earn 5% in the present climate, and some of the asset does not earn any return. Therefore as a consequence of these changes we have had our income reduced by $14000 per year with no way of making it up from our assets.
    Trust you understand the issue here the scenario is not as simple as suggested.

    Reply
  3. Jack says

    July 27, 2017 at 3:38 pm

    Under the new assets test, the age pension is reduced by $3 per fortnight for every $1000 of assets over the threshold. That is $78 over a year. Couples and singles, home owners and non-home owners all have different threshold but the rate of pension reduction is constant.

    If a pensioner won or inherited an additional $100,000, their pension would be reduced by $7,800 per year. That represents 7.8% of their additional capital. Unless that new capital can generate 7.8% income or more, these pensioners will find that although they have more capital than before, they actually have less income than before. The urge to maximize the age pension explains the incentive to reduce capital in assets that are assessed for the assets test. It also explains the incentive to increase capital in non-assessable assets such as the family home. Hence the rush to up-size, upgrade or renovate.

    However, if this pensioner could achieve an income return of over 7% (which is difficult but not impossible) any additional capital would not reduce their income by very much but that pensioner would also have the benefit of extra discretionary capital that they could dispose of as they wished over their retirement. It may also be very beneficial if that money was required for entry into aged care in the future.

    Prudence suggests that before capital is hurriedly dissipated in order to maximize the age pension, serious consideration should be given to capital needs in the future.

    Reply
  4. robert says

    July 25, 2017 at 8:32 pm

    What surprises me is that well before January 1st 2017 the change to the assets test was well promulgated by Morrison. I knew about it then and all of you should have known about it also! So where were you then? I was writing to my members of parliament, were you?

    Reply
  5. R Lind says

    July 25, 2017 at 10:25 am

    The assumption in all of this is that you maximise your income for estate building and saving and just live on the income. Where in all of these assumptions is there that a person with $800,000 has $400,000 more than a person with $400,000 to spend? Over 20 years this is at least $20,000 a year. There are many retirees who are using their money to live and spend in excess of what you term as income.

    Reply
  6. rick says

    July 25, 2017 at 5:37 am

    great article and great comments thank you ,I have started to spend up ,why not ,,

    Reply
    • kevin francis says

      July 25, 2017 at 9:54 am

      Indeed, I’m coming to the same conclusion. We don’t live forever.

      Reply
  7. Tony D'Ambra says

    July 24, 2017 at 7:08 pm

    A big assumption here is that the capital value of super assets (in a tax free environment) will not grow but simply stagnate and an annual super pension of 5% will be drawndown against the capital. Elsewhere in the July 2017 newsletter in a discussion of the 10/30/60 rule the point is made that historically 60pct of retirement income comes from the investment returns achieved during retirement.

    So on average over the period of retirement you can expect that your super capital even as it diminishes will achieve returns as high if you were still in pre-retirement.

    A rational investor would seek to maximise the pot of capital on retirement knowing that her capital will continue to earn a return over and above drawdowns for a considerable period into retirement. Why would anyone 20-30 years away from retirement deliberately not maximise her super and rely on a pension regime that will in most likelihood be radically different from the current system?

    I can’t help but suspect that all the angst is more about a privileged and minority cohort losing access to a part pension than concern about impacts on the budget and “perverse” incentives to game the system.

    Reply
    • Nigel W says

      July 25, 2017 at 10:38 am

      I think you miss the whole point of the article. It is about people being disincentivized from contributing more than $400,000 into super as there is no real benefit in doing so unless you are lucky enough to be able accumulate more than $1,050,000.

      Reply
    • Lyn says

      July 25, 2017 at 2:56 pm

      Tony, How is a person “privileged” with income $28,000 (drawdown from super contributions all made from AFTER-TAX earnings & partpension), fixed expenses $9500, a child still at Uni & takes 4/5 weeks to save for a tradesman for a day’s work if something goes wrong apart from materials cost?

      Today’s employees are privileged due to the $18,200 tax-free threshold which was $5400 for most of our working lives so a reduction to that or to threshold of $6000 at 2000/01 would have helped 2015 Budget from whence the part-pension reduction emanated, instead they clobber those with no ability to replace that part-pension reduction.
      Rosemary, I think possible to repeal legislation otherwise UK would still have Windows Tax of 1696 tho it did take 155yrs to repeal so not holding breath.

      Reply
  8. Rosemary says

    July 24, 2017 at 4:45 pm

    Hector, I believe the answer is no. The legislation cannot be undone.

    And my question is, is there an economic advantage to divorcing, buying two houses and living separately 🙂

    Reply
  9. Ramani says

    July 24, 2017 at 4:30 pm

    The article correctly comments on the potential for some to game the super system to maximise their benefits (as is their right). Any system can and will be so gamed, given self-interest prevails over altruism or an elightened long term outlook that matches the longer time horizon.
    Anyone who tries to so game the regime risks being caught out by the inevitable (almost guaranteed) furture changes as policy-makers play catch up with the fallout of perverse behaviour thorogh further rule changes. The article commits the fundamental fallacy of assuming status quo of current rules. No one knows what the future rules will be, but everyone knows they will change to protect revenue.
    Given probable personal variations (health, finance, family situation, relationships…), the optimal path is to protect oneself through sensible savings leaving scope for flexibility to adapt to future. Not easy admittedly, but better than relying on the lottery of current rules remaining unchanged.

    Reply
  10. Allan C says

    July 24, 2017 at 2:54 pm

    Hector, I think you’ve nailed it.

    I wonder if Trish has a mate akin to ‘the Castle’s hot shot that took on the Feds and won’.

    Reply
    • Lyn says

      July 24, 2017 at 11:28 pm

      Allan C, I believe Jack of ‘Save our Super’ is the legal hotshot, a legal challenge would be interesting so let’s hope he’s reading everyone’s comments.

      Reply
  11. kevin francis says

    July 24, 2017 at 2:49 pm

    We’re a traditional life long Liberal voting pair of part pensioners who are in the $800k zone. If the libs really believe that after chopping a $250 a week off oldies like us and then expect that we’ll come out and vote for them ever again (state or federal) then they’re delusional. We’ll be overseas having a spend up when the next election is called. Coastal Liberal held marginals will change the result at the next election. They’ll figure it out sooner or later.

    Reply
  12. Darryl says

    July 24, 2017 at 2:02 pm

    I was encouraged to increase my super balance so worked for extra 3 years to build up the balance. Now I’m hit with 150% retirementgate tax.
    Clearly this is retrospective legislation.

    Reply
  13. john says

    July 24, 2017 at 12:28 pm

    great comment, Hector (and question) 😉
    anyone have any suggestions as to the next step regarding a legal challenge to the legislation ??

    Reply
  14. Tony R says

    July 24, 2017 at 11:55 am

    A very good question Hector!

    Reply
  15. Hector says

    July 24, 2017 at 10:25 am

    The revised assets test legislation was passed in the Senate with support from 2 greens later found to be ineligible. Does this open the legislation to legal challenge?

    Reply
    • Lyn says

      July 24, 2017 at 11:24 pm

      Hector——-it jolly well should. If they can’t work out or check who is eligible to stand & then sit, one has to wonder if the Treasurer and his staff can add 2 plus 2 to have reached this cockeyed set of figures.

      Reply

Leave a Comment Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

How super works
How super works: A Super Guide
Latest super and retirement changes
Superannuation news
Super rates and thresholds
Latest superannuation changes: 2018/2019 guide
Latest Age Pension changes
Retirementgate
Federal Budget and superannuation
Mid-Year Economic and Fiscal Outlook (MYEFO) and superannuation
Royal Commission into Banking and Superannuation and Financial Services
Superannuation Reviews
Super for beginners
How super works: A beginners guide to superannuation
Super tips for beginners
Age-based superannuation guide
Super Guide for women
8 steps to super success
Superannuation investment for beginners
SMSFs for beginners
Finding lost super
Super rates and thresholds
Superannuation strategies
Super housekeeping strategies
Super contributions strategies
Super investment strategies
Age-based super strategies
Retirement strategies
SuperGuide checklists
Superannuation Guarantee rules
Superannuation Guarantee rules: An introduction
Latest SG
SG for employees
SG for employers
Non-payment of SG
Salary sacrifice and SG
Tax-deductible super contributions and SG
Comparing super funds
Types of super funds
MySuper and your super
Comparing super funds in 8 steps
Choosing a super fund (fund choice)
How do I complete a Standard Choice Form?
Investment performance
Super fees and charges
Insurance and super
Considering an SMSF
How-to Super Guides
Super Quizzes
Quiz 1: How ready are you to plan for retirement?
Quiz 2: Do you know how to boost your super?
Superannuation Q&As
Making super contributions
Making super contributions: A Super Guide
Contributions strategies
2018/2019 Contributions Guides
Super concessional (before-tax) contributions: 2018/2019 survival guide
Your 2018/2019 guide to non-concessional (after-tax) contributions
Cashing in on the co-contribution rules (2018/2019 year)
Super contributions caps
Super contributions caps for the 2018/2019 year
Concessional (before-tax) contributions cap
Catch-up concessional contributions
Non-concessional (after-tax) contributions cap
Bring-forward rule
Total superannuation balance and super contributions
Superannuation Guarantee (SG)
Latest SG rate
SG for employees
SG for employers
Non-payment of SG
Salary sacrifice and SG
Tax-deductible super contributions and SG
Salary sacrifice and super
Tax-deductible super contributions
Spouse contributions
Total superannuation balance
Contributions tax
Excess contributions
Super fund performance
Super fund performance: A Super Guide
Superannuation investment for beginners
Super investment: How it works
Default investment option
Benchmarking your super fund
Risk profile
Choosing an investment option
Switching investment options
Responsible investing
Retirement investment options
Superannuation investment: How does it all work?
Superannuation investment strategies
Investment choice (Choosing an investment option)
Responsible investing
SMSF investment
Types of super investments
Listed or unlisted investments
Franked dividends
Platforms/wraps
Investing in retirement
Super and borrowing
Latest performance (Superannuation investment returns)
Latest monthly results
Latest financial year results
Latest calendar year results
Investment Performance Reckoners
Best performing super funds
Top 10 super funds
Top 30 super funds
Top 30 pension funds
Investment Performance Reckoners
Investment Performance Reckoners
Superannuation Investment Performance Reckoner (5 investment options)
Asset Class Performance Reckoner (13 asset classes)
Monthly Superannuation Returns Performance Reckoner
Choosing an investment option
Default investment option
Your risk profile
Benchmarking your super fund
Buy/sell spread costs
Hedged vs unhedged international shares
Responsible investing
Switching investment options
Retirement investment options
SMSF investment
SMSF investment
Super fees and charges
Types of super fees
Top 10 cheapest super funds
Buy/sell spread costs
SMSF costs
Super taxes
Insurance premiums
Finding lost super reduces fees
Insurance and super
Life insurance: 10 important facts
Cheapest life insurance
Cheapest income protection
SMSFs and insurance
Super and tax
Super and tax: A Super Guide
Super and tax for beginners
Super tax tables: For under-60s
Super tax tables: For over-60s
Australian income tax rates and thresholds
Australian income tax rates
Senior Australians & Pensioners Tax Offset
Medicare levy
Low Income Tax Offset
Temporary Budget Repair Levy
Super rates and thresholds
Super tax rates for over-60s
Super tax rates for under-60s
Franked dividends (franking credits)
Contributions tax
Contributions tax: How it works
Division 293 tax
Low Income Superannuation Tax Offset
Excess contributions tax
Investment income tax (earnings tax)
How do the super tax rules work?
Capital gains tax and super
Franked dividends (franking credits)
Non-arm’s length income
Superannuation contributions tax
Retirement phase
How do the super tax rules work?
Superannuation payment options
Transfer balance cap
Exempt current pension income
Franked dividends (franking credits)
Non-arm’s length income
Superannuation benefit payments tax
SMSF pensions
Transition-to-retirement pensions
Superannuation benefit payments tax
Super tax tables: For under-60s
Super tax tables: For over-60s
Transfer balance cap
Superannuation death benefits
Superannuation death benefits
SMSFs
SMSFs: A Super Guide
SMSFs for beginners
How do SMSFs work?
Types of super funds
Is an SMSF right for you?
Enough super to justify costs?
Are you a typical SMSF trustee?
10 SMSF commandments
Your SMSF C-A-R-T obligations
Setting up an SMSF
SMSF trustee declaration
SMSF costs
How much does an SMSF cost?
Enough super to justify SMSF costs?
SMSF ATO supervisory levy
SMSF audit fees
SMSF investment
Obtaining financial advice
SMSF penalties
SMSF administration and compliance
SMSF compliance for super beginners
Your SMSF C-A-R-T obligations
Doing it yourself or outsourcing
Finding the right administrator
Setting up an SMSF
SMSF record-keeping and reporting checklists
SMSFs and accountants
SMSF audits
SMSF administrative penalties
SMSF investment
Super investing for beginners
Drafting your SMSF investment strategy
SMSF asset allocation
Superannuation investment strategies
Types of super investments
Investment returns for 13 asset classes
SMSF investment rules
Franked dividends
SMSF borrowing
SMSF pensions
Retirement phase (formerly pension phase)
Types of super benefits
Starting an SMSF pension
Minimum super pension payments
Transition-to-retirement pensions
$1.6 million transfer balance cap
Actuarial certificates
SMSF borrowing
SMSF Q & As
Planning for retirement
Planning for retirement: A Super Guide
Retirement planning for beginners
How to plan for your retirement
When can you retire?
How long will you live?
How much super is enough?
8 steps to super success
Superannuation investing for beginners
What is retirement phase?
Aspiring to a $1 million retirement
Retirement Calculators and Reckoners
What age can I retire?
Age-based Super Guide
How long will I live?
How much super do I need?
How much for a comfortable retirement?
Living on more than $60,000 a year
Living on more than $100,000 a year
Retirement Calculators and Reckoners
$1 million retirement (7% or 5% returns)
$1 million retirement (2% or 3% returns)
$1.6 million retirement
$1.6 million transfer balance cap
Types of super benefits
Taking a lump sum
Taking a super pension
SMSF pensions
Superannuation benefit payments tax
Will I get the Age Pension?
Obtaining financial advice
Retirement Calculators and Reckoners
How Much Super Is Enough Reckoner
Retirement Income Reckoner
Retirement Age Reckoner
Age Pension calculator
Annual Minimum Pension Payment Calculator
Accessing super
Accessing super: A Super Guide
14 legal ways to withdraw your super
Definition of retirement
Reaching preservation age
Turning 65 and super
Types of super benefits
Taking a super lump sum
Taking a super pension
SMSF pensions
Superannuation benefit payments tax
Accessing super early
14 legal ways to withdraw your super
Preservation age
Severe financial hardship
Compassionate grounds
Terminal illness
Permanent disability or permanent incapacity
Claiming insurance from super
Death
Divorce and super
Insurance and super
Leaving, living or working outside Australia
In retirement
In retirement: A Super Guide
Retirement Calculators and Reckoners
How Much Super Is Enough Reckoner
Retirement Income Reckoner
Retirement Age Reckoner
Age Pension calculator
Annual Minimum Pension Payment Calculator
Retirement phase (formerly called Pension phase)
Super tax rules
Types of super benefits
Transfer balance cap
Exempt current pension income
Franked dividends
Non-arm’s length income
Superannuation benefit payments tax
SMSF pensions
Transition-to-retirement pensions
Taking a super lump sum
Taking a super pension
Retirement phase
Types of super pensions
SMSF pensions
Transfer balance cap
Minimum super pension payments
Transition-to-retirement pensions
Defined benefit funds
Annuities
Working in retirement
Turning 65 and super
Over-65s work test
Transition-to-retirement pensions
Age-based Super Guide
Age pension age
Commonwealth Seniors Health Card
Age Pension rules
Latest Age Pension rates
How do the Age Pension rules work?
Age Pension age
10 important facts about the Age Pension
How do I apply for the Age Pension?
Age Pension assets test
Age Pension income test
Age Pension deeming rules
Obtaining financial advice
Life expectancy and super
Superannuation death benefits

Kick-start your retirement planning

Enter your email below and receive a free 7-day email series on planning your retirement.

You'll learn the initial steps to get you started, how much super you'll need, when you can retire and much more. At the end of the week you'll have the opportunity to quiz what you've learned.
Calculators and Reckoners
Newsletter archive

Footer

About SuperGuide

SuperGuide is Australia’s leading website on superannuation and retirement planning, with more than 4.5 million visits per year, and more than 30,000 newsletter subscribers.

SuperGuide was founded by Trish Power, (author of Superannuation for Dummies, DIY Super for Dummies, Super Freedom, Age Pension made simple, and many other books on super and investing), and Robert Barnes.

  • Learn more about SuperGuide
  • Contact us

Disclaimer

All information on SuperGuide.com.au is intended only as a guide. It is important to seek professional accredited financial advice when considering whether the information is suitable to your personal circumstances. Learn more

Before using this website

  • Terms and Conditions of Use
  • Privacy Policy and Privacy Collection Statement
  • Copyright Policy
  • Disclaimer

Further information

  • Learn about SuperGuide Premium
  • Superannuation and retirement planning books by Trish Power
  • Superannuation Glossary
  • Superannuation Newsletter
  • Super Funds Guide
  • What people say about SuperGuide
  • Advertise on SuperGuide
  • Careers
  • Sitemap
  • SuperGuide home page

  • How super works
    • How super works: A Super Guide
    • Latest super and retirement changes
      • Superannuation news
      • Super rates and thresholds
      • Latest superannuation changes: 2018/2019 guide
      • Latest Age Pension changes
      • Retirementgate
      • Federal Budget and superannuation
      • Mid-Year Economic and Fiscal Outlook (MYEFO) and superannuation
      • Royal Commission into Banking and Superannuation and Financial Services
      • Superannuation Reviews
    • Super for beginners
      • How super works: A beginners guide to superannuation
      • Super tips for beginners
      • Age-based superannuation guide
      • Super Guide for women
      • 8 steps to super success
      • Superannuation investment for beginners
      • SMSFs for beginners
      • Finding lost super
    • Super rates and thresholds
    • Superannuation strategies
      • Super housekeeping strategies
      • Super contributions strategies
      • Super investment strategies
      • Age-based super strategies
      • Retirement strategies
      • SuperGuide checklists
    • Superannuation Guarantee rules
      • Superannuation Guarantee rules: An introduction
      • Latest SG
      • SG for employees
      • SG for employers
      • Non-payment of SG
      • Salary sacrifice and SG
      • Tax-deductible super contributions and SG
    • Comparing super funds
      • Types of super funds
      • MySuper and your super
      • Comparing super funds in 8 steps
      • Choosing a super fund (fund choice)
      • How do I complete a Standard Choice Form?
      • Investment performance
      • Super fees and charges
      • Insurance and super
      • Considering an SMSF
    • How-to Super Guides
    • Super Quizzes
      • Quiz 1: How ready are you to plan for retirement?
      • Quiz 2: Do you know how to boost your super?
    • Superannuation Q&As
  • Making super contributions
    • Making super contributions: A Super Guide
    • Contributions strategies
    • 2018/2019 Contributions Guides
      • Super concessional (before-tax) contributions: 2018/2019 survival guide
      • Your 2018/2019 guide to non-concessional (after-tax) contributions
      • Cashing in on the co-contribution rules (2018/2019 year)
    • Super contributions caps
      • Super contributions caps for the 2018/2019 year
      • Concessional (before-tax) contributions cap
      • Catch-up concessional contributions
      • Non-concessional (after-tax) contributions cap
      • Bring-forward rule
      • Total superannuation balance and super contributions
    • Superannuation Guarantee (SG)
      • Latest SG rate
      • SG for employees
      • SG for employers
      • Non-payment of SG
      • Salary sacrifice and SG
      • Tax-deductible super contributions and SG
    • Salary sacrifice and super
    • Tax-deductible super contributions
    • Spouse contributions
    • Total superannuation balance
    • Contributions tax
    • Excess contributions
  • Super fund performance
    • Super fund performance: A Super Guide
    • Superannuation investment for beginners
      • Super investment: How it works
      • Default investment option
      • Benchmarking your super fund
      • Risk profile
      • Choosing an investment option
      • Switching investment options
      • Responsible investing
      • Retirement investment options
    • Superannuation investment: How does it all work?
      • Superannuation investment strategies
      • Investment choice (Choosing an investment option)
      • Responsible investing
      • SMSF investment
      • Types of super investments
      • Listed or unlisted investments
      • Franked dividends
      • Platforms/wraps
      • Investing in retirement
      • Super and borrowing
    • Latest performance (Superannuation investment returns)
      • Latest monthly results
      • Latest financial year results
      • Latest calendar year results
      • Investment Performance Reckoners
    • Best performing super funds
      • Top 10 super funds
      • Top 30 super funds
      • Top 30 pension funds
      • Investment Performance Reckoners
    • Investment Performance Reckoners
      • Superannuation Investment Performance Reckoner (5 investment options)
      • Asset Class Performance Reckoner (13 asset classes)
      • Monthly Superannuation Returns Performance Reckoner
    • Choosing an investment option
      • Default investment option
      • Your risk profile
      • Benchmarking your super fund
      • Buy/sell spread costs
      • Hedged vs unhedged international shares
      • Responsible investing
      • Switching investment options
      • Retirement investment options
      • SMSF investment
    • SMSF investment
    • Super fees and charges
      • Types of super fees
      • Top 10 cheapest super funds
      • Buy/sell spread costs
      • SMSF costs
      • Super taxes
      • Insurance premiums
      • Finding lost super reduces fees
    • Insurance and super
      • Life insurance: 10 important facts
      • Cheapest life insurance
      • Cheapest income protection
      • SMSFs and insurance
  • Super and tax
    • Super and tax: A Super Guide
    • Super and tax for beginners
    • Super tax tables: For under-60s
    • Super tax tables: For over-60s
    • Australian income tax rates and thresholds
      • Australian income tax rates
      • Senior Australians & Pensioners Tax Offset
      • Medicare levy
      • Low Income Tax Offset
      • Temporary Budget Repair Levy
      • Super rates and thresholds
      • Super tax rates for over-60s
      • Super tax rates for under-60s
      • Franked dividends (franking credits)
    • Contributions tax
      • Contributions tax: How it works
      • Division 293 tax
      • Low Income Superannuation Tax Offset
      • Excess contributions tax
    • Investment income tax (earnings tax)
      • How do the super tax rules work?
      • Capital gains tax and super
      • Franked dividends (franking credits)
      • Non-arm’s length income
      • Superannuation contributions tax
    • Retirement phase
      • How do the super tax rules work?
      • Superannuation payment options
      • Transfer balance cap
      • Exempt current pension income
      • Franked dividends (franking credits)
      • Non-arm’s length income
      • Superannuation benefit payments tax
      • SMSF pensions
      • Transition-to-retirement pensions
    • Superannuation benefit payments tax
      • Super tax tables: For under-60s
      • Super tax tables: For over-60s
      • Transfer balance cap
      • Superannuation death benefits
    • Superannuation death benefits
  • SMSFs
    • SMSFs: A Super Guide
    • SMSFs for beginners
      • How do SMSFs work?
      • Types of super funds
      • Is an SMSF right for you?
      • Enough super to justify costs?
      • Are you a typical SMSF trustee?
      • 10 SMSF commandments
      • Your SMSF C-A-R-T obligations
      • Setting up an SMSF
      • SMSF trustee declaration
    • SMSF costs
      • How much does an SMSF cost?
      • Enough super to justify SMSF costs?
      • SMSF ATO supervisory levy
      • SMSF audit fees
      • SMSF investment
      • Obtaining financial advice
      • SMSF penalties
    • SMSF administration and compliance
      • SMSF compliance for super beginners
      • Your SMSF C-A-R-T obligations
      • Doing it yourself or outsourcing
      • Finding the right administrator
      • Setting up an SMSF
      • SMSF record-keeping and reporting checklists
      • SMSFs and accountants
      • SMSF audits
      • SMSF administrative penalties
    • SMSF investment
      • Super investing for beginners
      • Drafting your SMSF investment strategy
      • SMSF asset allocation
      • Superannuation investment strategies
      • Types of super investments
      • Investment returns for 13 asset classes
      • SMSF investment rules
      • Franked dividends
      • SMSF borrowing
    • SMSF pensions
      • Retirement phase (formerly pension phase)
      • Types of super benefits
      • Starting an SMSF pension
      • Minimum super pension payments
      • Transition-to-retirement pensions
      • $1.6 million transfer balance cap
      • Actuarial certificates
    • SMSF borrowing
    • SMSF Q & As
  • Planning for retirement
    • Planning for retirement: A Super Guide
    • Retirement planning for beginners
      • How to plan for your retirement
      • When can you retire?
      • How long will you live?
      • How much super is enough?
      • 8 steps to super success
      • Superannuation investing for beginners
      • What is retirement phase?
      • Aspiring to a $1 million retirement
      • Retirement Calculators and Reckoners
    • What age can I retire?
    • Age-based Super Guide
    • How long will I live?
    • How much super do I need?
      • How much for a comfortable retirement?
      • Living on more than $60,000 a year
      • Living on more than $100,000 a year
      • Retirement Calculators and Reckoners
      • $1 million retirement (7% or 5% returns)
      • $1 million retirement (2% or 3% returns)
      • $1.6 million retirement
    • $1.6 million transfer balance cap
    • Types of super benefits
      • Taking a lump sum
      • Taking a super pension
      • SMSF pensions
      • Superannuation benefit payments tax
    • Will I get the Age Pension?
    • Obtaining financial advice
    • Retirement Calculators and Reckoners
      • How Much Super Is Enough Reckoner
      • Retirement Income Reckoner
      • Retirement Age Reckoner
      • Age Pension calculator
      • Annual Minimum Pension Payment Calculator
  • Accessing super
    • Accessing super: A Super Guide
    • 14 legal ways to withdraw your super
    • Definition of retirement
    • Reaching preservation age
    • Turning 65 and super
    • Types of super benefits
      • Taking a super lump sum
      • Taking a super pension
      • SMSF pensions
      • Superannuation benefit payments tax
    • Accessing super early
      • 14 legal ways to withdraw your super
      • Preservation age
      • Severe financial hardship
      • Compassionate grounds
      • Terminal illness
      • Permanent disability or permanent incapacity
      • Claiming insurance from super
      • Death
    • Divorce and super
    • Insurance and super
    • Leaving, living or working outside Australia
  • In retirement
    • In retirement: A Super Guide
    • Retirement Calculators and Reckoners
      • How Much Super Is Enough Reckoner
      • Retirement Income Reckoner
      • Retirement Age Reckoner
      • Age Pension calculator
      • Annual Minimum Pension Payment Calculator
    • Retirement phase (formerly called Pension phase)
      • Super tax rules
      • Types of super benefits
      • Transfer balance cap
      • Exempt current pension income
      • Franked dividends
      • Non-arm’s length income
      • Superannuation benefit payments tax
      • SMSF pensions
      • Transition-to-retirement pensions
    • Taking a super lump sum
    • Taking a super pension
      • Retirement phase
      • Types of super pensions
      • SMSF pensions
      • Transfer balance cap
      • Minimum super pension payments
      • Transition-to-retirement pensions
      • Defined benefit funds
      • Annuities
    • Working in retirement
      • Turning 65 and super
      • Over-65s work test
      • Transition-to-retirement pensions
      • Age-based Super Guide
      • Age pension age
    • Commonwealth Seniors Health Card
    • Age Pension rules
      • Latest Age Pension rates
      • How do the Age Pension rules work?
      • Age Pension age
      • 10 important facts about the Age Pension
      • How do I apply for the Age Pension?
      • Age Pension assets test
      • Age Pension income test
      • Age Pension deeming rules
    • Obtaining financial advice
    • Life expectancy and super
    • Superannuation death benefits
  • Saved articles

    Save your retirement: Join SuperGuide Premium

    For $132 per year, you can receive expert commentary on the latest super, retirement and SMSF issues, access to a curated and regularly updated library of 650-plus articles, and regular newsletters and updates.

    Or you can try one month’s access for just $22.

    Learn more, or login below.

     



     
    Forgot Password

  • About SuperGuide