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Pension changes must consider social security: SPAA
The SMSF Professionals’ Association of Australia (SPAA) has called on the Government to conduct more rigorous accounting regarding the cost that a pension age rise would have on other social security claims.
It says while there has been much analysis of the superannuation system’s sustainability, the flow-on impacts of lifting the pension age to 70 have not been adequately measured.
The increase in the preservation age could see retirement-approaching Australians draw on other government benefits, SPAA director, technical and professional standards Graeme Colley said.
“People will be forced to seek other types of benefit and if current rules continue with an increased pension age, any amounts accumulating in superannuation are excluded for the assets test.
He said older Australians in labour-intensive jobs in particular might be reliant on programs like Newstart to supplement their income.
“So that sustainability and self provision of retirement benefits can be achieved, SPAA believes stronger links should be made to integrate the age pension system and the retirement income system,” Colley said.
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The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation as a bequest vehicle.
Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
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