The peak body for superannuation today welcomed the announcement that there would be no paperwork burden on lower income earners to take advantage of the low- income superannuation contribution.
The Association of Superannuation Funds of Australia (ASFA) said the previously announced rebate for workers earning less than $37,000 a year would have required those individuals to lodge a tax return in order to qualify. However, this would have conflicted with plans to lift the tax-free threshold to $18,200 from 1 July 2012 thereby exempting around one million low-income earners from having to complete a tax return.
ASFA said the decision for the Australian Taxation Office (ATO) to auto-assess the entitlement of low-income earners, announced in the Government's Mid-Year Economic and Fiscal Outlook (MYEFO), was a sensible one that would benefit many low-income Australians.
In total 3.6 million Australians are expected to receive the rebate known as the low-income superannuation contribution.
"This ensures there is equity in the system and it does not place an undue burden on those least well off; the rebate will just happen automatically," said Pauline Vamos, ASFA's chief executive officer.
"This step is part of the numerous reforms in train that will make super easer to do business with."
Offsetting the low-income rebate changes is the scaling back of the Government superannuation co-contribution.
Both the matching rate and the maximum payment of the co-contribution have been reduced.
"This is about looking at a more sustainable and comprehensive measure that will benefit more people," said Ms Vamos.
The MYEFO also included a decision to delay for another year (until 2014-15), the increase in the superannuation contribution cap for those aged under 50.
This was disappointing, ASFA said.
"We know that constant tinkering with the rules of the super system makes people nervous.
"However it is a 'pause' not a removal of the change due to the current difficult budgetary environment."
For media inquiries, please contact:
Pauline Vamos, CEO, 0433 169 342
Rebecca Glenn, GM Marketing and Communications, 0416 170 439
Megan McDougall, Media and Communications Coordinator, (02) 8079 0849
About ASFA - the voice of super
The Association of Superannuation Funds of Australia is the peak industry body representing the superannuation and retirement industry. Its members represent over 90 per cent of the approximately 12 million Australians with superannuation. ASFA members manage or advise on the bulk of the $1.3 trillion in superannuation assets as at September 2011. ASFA is the only organisation that represents all types of superannuation funds (retail, industry, corporate and public sector) and associated service providers.