20 April 2023
Superannuation delivering for Australians
A new research report released today by the Association of Superannuation Funds of Australia (ASFA) indicates that superannuation is delivering substantial improvements in retirement income for Australians and that as the system matures there will be even greater benefits to come.
ASFA’s report also indicates that recent changes to superannuation tax settings have already substantially improved the equity of the system and that proposed further changes will further limit the taxation benefits for those on high incomes and with high superannuation balances.
The report also found that the great bulk of people pass away with little or no superannuation and that measures such as the Transfer Balance Cap and the additional tax on balances above $3 million are addressing the small minority of cases where there are very large balances.
Other key findings include:
- Introducing higher rates of taxation for balances over $3 million is projected to lead to a 9.5 per cent decrease in tax concessions in relation to investment earnings. Those who will be affected are mostly aged 60 and over, with around two-thirds male. Around half are retired with those still in employment or business mostly involved in professional roles.
- Insurance through superannuation, while not traditionally considered to be an equity measure, is a very effective redistributive mechanism, that delivers substantial benefits to those most in need in Australian society.
- As a result of increasing superannuation account balances, at Age Pension eligibility age an increasing proportion of retirees have substantial private incomes. Only around 40 per cent of Australians aged 66 to 69 currently receive the Age Pension. Without super, there would be more than 500,000 extra individuals receiving the Age Pension.
- Superannuation is substantially improving retirement incomes for nearly two million retired Australians by providing regular income streams. Around 600,000 households, nearly one million Australians, are mainly supported by superannuation in retirement.
“The upcoming Federal Budget provides an opportunity to further improve equity in Australia’s superannuation system.
“Introducing Superannuation Guarantee (SG) payments on paid parental leave and increasing the upper threshold for the Low Income Superannuation Tax Offset (LISTO) would substantially assist low to middle income earners, particularly women,” said ASFA Deputy CEO, Glen McCrea.
For further information, please contact:
ASFA Media team, 0451 949 300.
ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry. It is a not-for-profit, sector-neutral, and non-party political, national organisation. ASFA’s mission is to continuously improve the superannuation system, so all Australians can enjoy a comfortable and dignified retirement.