THE HON JOSH FRYDENBERG MP
20 February 2019
RETIREE TAX: LABOR MUST TELL THE TRUTH TO PENSIONERS
Tens of thousands of Australian pensioners could be hit by Labor’s retiree tax. That is fact.
Labor is deliberately attempting to mislead Australians about this fact, claiming that their Pensioner Guarantee will protect pensioners from their proposed changes.
That is not true.
Labor MPs need only refer to a media release from Chris Bowen in March 2018* to understand that pensioners will be hurt by their tax:
“Self-managed Superannuation Funds with at least one pensioner or allowance recipient before March 28 2018 will be exempt from the changes.”
Fact: Any individual who was a member of a self-managed super fund (SMSF) and became a pensioner after 28 March 2018 will lose out under Labor.
Fact: Existing aged pensioners who take out a SMSF from 28 March 2018 will also be hit.
Under Labor’s plan, around 50,000 pensioners in SMSFs would be ineligible to receive refundable franking credits over the medium term, and around 30,000 will be pensioners already receiving dividends with franking credits who will be denied a refund.
According to ATO data there are around 5,000 SMSFs per year that are either established by existing pensioners or an existing member receives a pension for the first time, based on analysis of individual and SMSF income tax returns from 2012-13 to 2016-17. Around 3,000 of these 5,000 SMSFs receive franking credit refunds in the same year, as reported in SMSF tax returns.
This data makes it clear thousands of pensioners will be hurt by Labor’s retiree tax if there is a similar take up in the future.
Labor’s retiree tax is a shameless tax grab from those, including pensioners, who have done the right thing and worked hard to save for their retirement.
Labor must come clean and tell the truth to Australian pensioners about the devastating impact their retiree tax will have on them.
It is the lowest of the low for Labor to attempt to mislead Australian pensioners.