The original proposal, put forward two weeks ago by the Federal Opposition, was called out by COTA for its failure to recognise there are people of low and modest means who rely on the payments from excess dividend imputations, and who would not be able to change their arrangements in retirement to make up lost income.
COTA Chief Executive Officer (CEO) Ian Yates said, on the initial release of the policy, that the peak body would “negotiate” with the Opposition about the situation of pensioners and other low income/low asset retirees to “mitigate this unexpected impact”.
Mr Yates announced that he was confident that the Opposition would give a “good hearing”, and has since welcomed their revised policys Pensioner Guarantee.
“If you are a full or part pensioner you obviously don’t have a hight income and, following the pension asset test changes that commenced on 1 January 2017, you don’t have as large a nest egg either,” Mr Yates explains.
“Most pensioners live on very tight budgets and the loss of any income hurts.
“The Opposition has given us a good hearing, and their announcement of the Pensioner Guarantee means that all pensioners and allowance recipients will be protected from the abolition of cash refunds for excess dividend imputation credits when the policy commences in July 2019, if Labor is elected to Government at the next Federal election.”
Australians with self-managed superannuation funds with at least one pensioner or allowance recipient before 28 March 2018 will also be exempt from the changes.
Mr Yates comments that while the Government’s reforms to superannuation in 2016 were welcome, those with high income are still receiving too much leniency.
“The principal tax concessions on superannuation are still too generous for high income, high asset people, so also giving them concessions through cash refunds of franking credits above offsetting taxation obligations is not justifiable,” he explains.
“The Federal Budget cannot afford to continue to forgo revenue by giving concessions and tax breaks to people who are well off and don’t need more money to live comfortably, when there are so many real needs not being met in our community.”
Given these views, Mr Yates says COTA has also advocated to the Opposition that some of the additional revenue raised from this change should be invested in measures that will support older Australians such as:
Reducing the waiting list for home care packages in aged care, where tens of thousands of people are waiting up to a year for help
Finally putting in place an oral and dental care service for older Australians
Making superannuation fairer for women and low-income people
Reducing hospital waiting lists, especially for joint replacement surgery