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NewsCuts to Super: what they could mean for you
Cuts to Super: what they could mean for you

Cuts to Super: what they could mean for you

Tags: Cost of Living Superannuation
Last updated by Jess Lindell on

100271122-broken-nest-egg-gettyp.600x400Some Australian workers aged over 50 will be $20,000 or more worse off after an unexpected deal between the Government, the Palmer United Party and crossbench Senators.

The last-minute deal on Tuesday night means the planned increases to compulsory superannuation contributions from 9 to 12 per cent have been delayed by 6 years.

If you’re still working, your Super contributions now won’t rise again until 2021.

3.6 million low-income workers, including over 2 million women, will be further hit, as they will also lose $500 per year when the Low Income Superannuation Contribution is abolished in 2017.

So what’s changed?

The amount of money employers are required to contribute to Superannuation has slowly been increasing from 9 to 12%.

Since July 1 this year, employers have been required to pay a minimum of 9.5% of earnings into superannuation. The minimum amount of superannuation contributions your employer had to pay would’ve increased to 12 per cent by 2019.

The Government’s deal with the Palmer United Party means the increases will be delayed and won’t reach 12 per cent until 2025.

According to research by Industry Super Australia (ISA), for a 50-year-old on $100,000 a year, it will mean almost $20,000 less in contributions by the retirement age of 67.

What about the Low Income Superannuation Contribution?

Australian workers who earn up to $37,000 get a tax rebate known as the Low Income Superannuation Contribution (LISC).

This means the Government pays up to $500 each year into the superannuation accounts of low-income earners to help them save for their retirement.

Under the new deal this contribution will be abolished.

The abolition of the LISC is particular unfair to women, as they make up two-thirds of the 3.6 million lowest paid workers.

The deal was struck so that the Government could abolish the mining tax, and the crossbench Senators such as Clive Palmer could save the Schoolkids Bonus, as this story explains.

The Government argues we will have more money in our pockets in the short-term even if we have less to retire on. What do you think?

Originally posted on .

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Jacquie
Jacquie from NSW commented:

Clive Palmer is a complete scumbag...what sort of person gets to make these rulings in this modern day and age...he has used the Chinese money to fund and bribe his way into the election process...I am totally disgusted by this person and many many Australians feel this way...he cannot keep holding Australia to ranson while he plays his dirty game of furthering his own agenda...he needs to be bought to account and quickly...its almost like Bielke Peterson has never died and god knows how long it took to rid Queensland of him.... I sincerely hope the Chinese Government take this seriously and make him return their 12 million plus interest....this is nothing short of pure theft...he needs to go to jail for this.... 

Sydney
Sydney from NSW commented:

it was only a matter of time before governments and super funds found away to get there grubby little snouts into the feed bin of every Australian who has super, Super is now the fattest cow in the paddock and is about to be milked by the very people we have trusted to protect us from such swine, Abbott is showing us that he really is a mad monk. 

Jan
Jan from NSW commented:

I worked for a small company before retiring 18mths ago, I feel that an increase of Superannuation to 12% will put a lot of small companies out of business 

Theresa
Theresa from QLD commented:

I was surprised at the initial strong biased commentary by Jess but as some one has pointed out she comes with a huge background of Labor Party positions. Fifty-up is suppose to be providing unbiased information but from what I have seen it is a money-making venture staffed by former Labor Party members. I agree with the comment I would rather have a job and be able to put my own money towards my super than have employers struggling to find the increasing super levy and stay in business. When are people going to wake up that there are serious financial issues coming that need to be looked at. If we don't have a strong business community, we don't have a job, so increased super levy is just wishful thinking. The Labor Party has dealt themselves out of any influence by their stubborn attitudes and is letting the PUP party (ie. Clive Palmer) play merry-hell with everything. We are getting what some people voted for - a mess. 

peter
peter from NSW replied to Theresa:

Thank goodness someone else can think for themselves Theresa. I agree with most of your comments and concur with your sentiments. Australia, wake up, if you want it you have to work for it, no more handouts or free passage to retirement or anywhere else for that matter. 

Peter
Peter from QLD replied to Theresa:

i agree with your observations Labour everywhere trying to influence 

roselyn
roselyn from NSW commented:

The employer dollars that are paid for the worker into compulsory supper were always paid instead of pay rises. It was a deal stitched up between the Labor Federal government when Paul Keeting was treasurer, and the ACTU who agreed not to advocate and agitate for wage increases while the compulsory super was been phased in, so in reality the bosses didn,t pay it as a cost it was the workers own money in lieu of pay rises. The new freeze on extra super %'s is the reverse the conservatives let the worker go for pay increases and hope they put some away into their super accounts . but will they or will they end up with less in retirement. Seems the worker pays or the worker pays. 

Christine
Christine from NSW commented:

I can't believe this govt. they have lied that much to get into power, now they're muckin around with peoples super. People should be up in arms about it. To build super as a working mother, it is very difficult & most of the time you're too busy to do anything about it until its too late. 

Maria
Maria from NSW commented:

I'm not too worried, it will all change in the next election, even if Liberals get in no way Clive will, he was given a change and has turned out to be a waste of space. 

george
george from NSW commented:

People should realise that nothing is free. Someone has to pay for it. Therefore super should be left up to the individual. If the employer contributes toward the all employees super then that means that someone loses his job in order to pay for it. I think 9% is far too much. I would prefer to work. If your a public servant then you have no problems because the taxpayer pays. if you work for an employer then he has to make a profit in order to keep people employed. That means that if the super payment goes through then someone will lose their jobs in order to pay for the increase. Which do you prefer, a job with no increase or no job with an increase in super. 

Kenneth
Kenneth from NSW commented:

Get a life Jess and report your story without bias, isn't it about time we started to take responsibility for our own super, people who whine about this government not being the one they voted for are probably wishing for more freeeeee handouts, in that case vote Labor and put this great country into more economic debt. 

Carol
Carol from QLD commented:

What a typical lefty point of view. Look up Linkeden and see who Jess Lindell really is. Bill Shortens sidekick. How come you only told one side of this "story" Jess What she didn't say was that instead of a yearly pay increase of say 2.5% from the boss, you would only get 2% if the super increase went ahead. So put the extra in yourself. What a deceitful piece of work 

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