In this guide
Older affluent males hit hardest by tax changes to large super balances
The people most likely to be impacted by the proposed changes to the taxation of investment earnings on superannuation balances over $3 million are men (65%) aged over 60 (90%), according to a policy and research paper by the Association of Superannuation Funds of Australia (ASFA).
In the paper ASFA analysed statistics from the ATO sample file for 2019–20 and from SMSF taxation statistics.
Their analysis also found those likely to be affected are relatively affluent, with approximately 25% owning a rental property, 25% receiving dividends of over $40,000 a year and around 15% with total income for tax purposes of over $500,000.
“Labourers and unskilled workers are not represented in those affected by the measure,” the report stated.
The ASFA analysis also revealed that currently approximately 30% of couples and singles reach or exceed the ASFA Comfortable Retirement Standard but by 2050 ASFA expects 50% of retiree households will be able to afford expenditure at the level of ASFA Comfortable or above.
On a macro level, Australia’s expenditure on the Age Pension is relatively low at 2.4% of GDP, compared to the OECD average of 8.8% of GDP. Even if the total cost of the Age Pension and super tax concessions doubled to be around 5% of GDP by 2060, as projected by the Retirement Income Review, that is still a very modest amount in international terms, according to ASFA.
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