ASFA super report shows system working well
/A new report by the Association of Superannuation Funds of Australia (ASFA), Equity and Superannuation, reveals that the superannuation system of Australia is delivering as intended, with more benefits to come.
Recent changes to superannuation tax, the report says, have already greatly improved equity within the super system, with more changes set to curb tax benefits that serve only those on high incomes and with high superannuation account balances.
The report also explains that most people die with little or no superannuation, so the Transfer Balance Cap and additional tax on balances above $3 million only apply to a minority of cases of those with very large account balances.
Key findings of the report include:
Higher tax rates for balances over $3 million will lead to a projected 9.5 per cent decline in tax concessions related to investment earnings. Affected account holders are typically aged over 60 and are male. Half are retired, with those still working in professional roles.
Group insurance via superannuation is an effective redistributive mechanism delivering large benefits to more vulnerable Australians.
With growing superannuation account balances, those at Age Pension eligibility age tend to have substantial private incomes. About 40 per cent of those aged 66-69 currently receive the Age Pension, and without superannuation, there would be 500,000 more people on the Age Pension.
Superannuation has been shown to substantially improve retirement incomes for around two million retirees via a regular income stream. Over half a million households and almost one million Australians are mainly supported by superannuation in retirement.
Future changes include the introduction of the Superannuation Guarantee (SG) on paid parental leave payments and increasing the upper threshold for the Low INcome Superannuation Tax Offset (LISTO) will increase superannuation savings, particularly for women.
