How does changing government legislation affect my retirement?
Australia’s superannuation industry is dynamic and is frequently affected by a number of factors, including:
- Changes in government legislation and policy
- External regulating authorities
- Shifts in the superannuation industry itself
In Australia, there are a number of separate acts, deeds and orders that can affect your retirement preparedness. It’s no surprise that keeping on top of changing legislation can be exhausting.
What legislation will affect you?
Federal budget results generally have a lot in store for Australians approaching retirement and current retirees.
Most recently, some significant changes regarding the age pension for retirees include:
- The income test. 1 January 2015 marked the beginning of a number of significant changes to the income and assets test rules. Today, all new account-based retirement income streams are now treated as financial assets. In addition, since 1 January 2016, the level of income received from most defined benefit super pensions that can be excluded from the Age Pension income test, has now been capped at 10%.
- The assets test. From 1 January 2017, the assets test limit to qualify for a full pension will increase to $375,000 for couples and $250,000 for individuals. The taper rate for the assets test will also reduce your Age Pension entitlement by $3 a fortnight for every $1000 of assets you own over the full Age Pension threshold.
- Commonwealth Seniors Health Care (CSHC) card. 1 January 2015 meant that account-based retirement income streams were assessed for new CSHC card recipients as well.
- Seniors supplement existence. Many self-funded retirees who don’t qualify for an Age Pension but hold a Commonwealth Seniors Health Card have lost their Seniors Supplement.
- Terminally ill citizens. If you are terminally ill and have been officially diagnosed with having 24 months or less to live, you can now access your super early. The parameter has increased by 12 months since the previous budget release.
Don’t forget that it’s also important to be aware of legislation changes from previous years. Some decisions can take a few years to be passed as law.
Navigating the numerous rules (and exceptions to the rules) is no easy feat. If you are approaching retirement, it’s a good idea to engage an experienced financial planner who can help you make sense of these changes.
For over 25 years we’ve helped more than 60,500 Australians like you on their retirement journey. So you can be comfortable that you’re in expert hands.
We have extensive experience in public sector superannuation schemes and we know how to leverage changes in legislation to deliver the best outcomes for your retirement.
