Australia: Asset test rules hurting retirement savings: SMSFA
SMSF Association chief executive John Maroney said changes to the means test taper rate and thresholds, which came into effect on 1 January 2017, reduce the entitlement to the Age Pension as a person or couple’s assets increase, leading to “significantly adverse and presumably unintended consequences.”
The changes have a significant impact on middle-income earners who have accumulated an average-sized superannuation balance and benefit from a part Age Pension payment that supplements their superannuation income, he said.
“For home-owning couples who have a superannuation balance between $500,000 and $800,000, the increased taper rate creates a ‘black hole’ where their assets above the asset test free amount cause them to be worse off in terms of income,” Maroney said.
Source: Financial Standarda
