Super no longer a wealth transfer mechanism
The Federal Government appears to have substantially achieved its goal of limiting the degree to which superannuation can be used for wealth transfer, according to the Financial Services Council (FSC).
In a year-end wrap-up of policy events in the superannuation industry, the FSC’s senior policy manager for superannuation, Blake Briggs said the Government’s objective had been delivered as a result of the 2016 and 2017 Federal Budget processes.
Writing in the latest print edition of Super Review, Briggs said that while the 2017 Budget was perhaps the most substantial package of superannuation tax reforms since the 2016 Budget, the collective outcome had been substantial.
“Collectively, however, the Government has achieved its goal of materially limiting the extent to which superannuation can be used for wealth transfer,” he said.
Briggs noted that the Government had committed to no further changes in the life of the Turnbull Government - a promise matched by Shadow Treasurer, Chris Bowen.
However, he said the net result had been an unprecedented increase in the complexity of the system.
“Uncertainty also stems from multiple Budget measures yet to be legislated, such as the first home buyer saving scheme, which consumers can conceivably already make contributions towards but is not yet the law of the land,” Briggs said.
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What a load of rubbish! The government has not closed off the wealth transfer. A 65 year old person who had $30m in their super fund before all these ridiculous changes, had to draw 5% of the value of the fund as a pension ie $1.5m. Now they only need to draw 5% of $1.6m or $80k and they can leave the rest in their fund until they die. Tax can be completely avoided with the right tactical asset allocation.
The government has created the very estate planning vehicle it was seeking to prevent. The cost of this nonsense is the complete undermining of the superannuation system. The aged pension will not be available for most people. NO future government can afford it.. All governments should be giving tax incentives to middle income earners to be self funded retirees so it can fund the really needy.