The accuracy of the content is not guaranteed. Please rely only on the authorised document. People retiring in the coming financial year could find their superannuation payout caught by the Timor Medicare surcharge, according to ASFA – The Voice of Super (Association of Superannuation Funds of Australia). One-off payments such as a super benefit could catapult the ordinary taxpayer into the 'wealthy' bracket under flawed threshold assessment rules for the Timor surcharge, proposed to help pay for the Australian peacekeeping force. In its 2000/01 Pre-Budget Submission to Treasury, ASFA is calling for Eligible Termination Payments (ETPs) to be kept out of the assessment for the surcharge. "ASFA has no objection to the Government adopting this temporary revenue measure," said Philippa Smith, CEO of ASFA. "However, there are equity problems in the current arrangements, because 'income' under the Medicare definition encompasses a wide range of payments, including one-off super benefits and ETPs." "Someone earning, say, $35,000 per year on the point of retirement and collecting a super payout of $100,000 would have an 'income' according to the Medicare system of assessment of $135,000. This would result in them paying a surcharge of $1350." "It is clearly unfair and inequitable to compel someone in those circumstances to pay the Timor Medicare levy surcharge, given that the ETP is a one-off payment. It falsely places them in the same bracket as those who regularly earn a high income through their employment or the proceeds of investments." said Ms Smith. ASFA is requesting that, at the very least, Eligible Termination Payments should be excluded from the threshold assessment of whether the surcharge should apply. Also under scrutiny by ASFA is the current requirement that long-term unemployed people over the age of 55 have their superannuation assets included in the means test for Newstart payments. "This depletes older unemployed people's retirement incomes, by forcing them to use their super while they still wish to remain in the workforce. This is inconsistent with the government's policy of preserving super benefits until genuine retirement.," said Ms Smith.
|
