The 2014 Budget sparked a lively discussion recently between Dixon Advisory Executive Chairman Daryl Dixon and ABC radio Nightlife host Tony Delroy.
Issues affecting retirees including superannuation, the age pension and the seniors health card were covered during the program on 27 May 2014.
Daryl pointed out that funding of an ageing population was nothing new, having been recognised as an issue in 1980.
“Ageing of the population is a steady situation, whereas growth in national income and growth in tax collections is really essential. We’ve got nothing up our sleeve,” Daryl said.
“Our age pension is not funded. There is $100 billion in the Future Fund, but there’s also a liability, I believe, which is underestimating the budget to fund public servants’ pensions. That $126 billion saving in the military scheme suggests to me that they’ve underestimated the costs of the future liabilities.”
Some of the key points Daryl made were:
Nothing substantial would happen in relation to the age pension until 2017, where the indexation would reduce from higher of average male wages or CPI to just CPI.
From 1 July 2013, penalty tax for excess super contributions had been removed, with super members having the opportunity to take the excess contributions back out of the fund.
From 1 July 2014, super fund members would be able to make higher concessional contributions - $30,000 p.a. for under 50s and $35,000 for 50s and over.
Compulsory super contributions would increase from 9.25 to 9.5% from 1 July 2014, though a lot of people would still not have enough super.
It would be more difficult for future retirees to obtain a seniors health card because superannuation would be deemed, even if it’s a pension, from 1 January 2015.
The Military Superannuation and Benefits Scheme would be closed to new members (from 1 July 2016) but existing members would not be affected.
Listen to these topics and others covered during the interview and the discussion with callers on ABC Nightlife on 27 May 2014.
It runs for 42 minutes.