The Coalition government is calling Labor’s proposals to end cash payments by the taxation office for excess share dividend imputation credits a “retiree tax” and an attack on pensioners. In fact:
- No pensioners or part pensioners will be affected at all.
- Exemptions include individuals receiving the Age Pension, Disability Support Pension, Carer Payment, Parenting Payment, Newstart and Sickness Allowance.
- Self managed super funds (SMSFs) can have up to six members. Where one of a couple is receiving a part pension the exemption will apply to the fund.
- SMSF schemes set up before 28 March 2018 will be grandfathered according to Peter Martin talking on ABC RN Drive.
- Martin also pointed out that it is possible to receive a part pension with an income of up to $78,000 pa.
- Currently under the existing rules it would be theoretically possible to receive a superannuation income of $80,000 pa, and then in addition receive a cash cheque from the taxation office of about $34,000.
- These benefits flow to one in every 25 Australians, the rest of us in effect pay for them.
- When cash payments were introduced in 2001 the rule change cost the budget $550 million. The current cost is about $5 billion, $8 billion next year. It is simply unsustainable. Peter Martin says the current scheme is as Australian as the echidna. No other country in the world does it.
Continue reading Dividend imputation reform vs a dishonest scare campaign