In an article for the website Money Management, Jasmine Goh talks about the changes worked out via the Federal Budget and how it may cause a loss of entire part pension for 90,000 fund members even as it partially erodes the part pension of close to 250,000 fund members.
Part pension
SMSF trustees across Australia are feeling the heat of the Federal Budget change. And this, while they were just feeling relieved about the government’s confirmation of the status quo in the superannuation sector.
The much debated rise from $1.5 to $3.00
From the year 2017, the assets-free threshold for singles will be $250,000 and for couples it will be $375,000. Tapering rate has been in news lately and there is a good reason why. Over the asset threshold, it will be worked out at $3.00 per $1000 as against $1.5 per $1000 (present level).
While there is a consensus that the fundamental principle behind wealth creation and preservation of capital won’t alter, there needs to be a distinct reassessment of retirement goal and the strategy being employed to succeed in them.
From means-tested to non-means tested
There is also a sense of widespread apprehension regarding a possible move from the means-tested assets to the non-means tested ones and the apprehension is not a meaningless one either.
You can read the original article here.
Taper rate changes worrisome
The Taper rate is most likely to affect those Australians who are expected to retire in the next 10 to 15 years. SMSF trustees standing to lose out $3 in fortnightly pension instead of $1.5 for every $1000 above the lower threshold can’t certainly be good news. The government is doing its best to spread cheer, claiming that households with assets below $451,000 (excluding the family home) need not be bothered. This, however, is marginal consolation.
