Matters being pursued with the State Government.
1. On the death of a contributor a surviving spouse to receive a payment equivalent to the full pension continuing to be paid for a specified period, e.g. one month or two months. In the cases of the age pension and Commonwealth superannuation pensions when one member of a couple dies the survivor receives a payment to ensure that, for a specified period, his/her income is maintained at the same value as the couples’ income prior to the death. The specified period is about fourteen weeks for both the age pension and Commonwealth superannuation pensions. With Commonwealth superannuation pensions the maintenance of income is achieved by making a lump sum payment to the surviving spouse which is equal to the difference between the full pension and the surviving spouse pension for the 14 week period.
2. Pension scheme taxation status – this has been of interest to the Association for many years. Members pay personal contributions from their after-tax income and in retirement receive pensions that are taxed as normal income with a 10% tax offset able to be claimed. Other income (including age pension) is added to the superannuation pension income and taxed at the marginal rate for the combined income. Most superannuation pensions are tax-free after age 60 and any other taxable income is taxed as if it is the only income.A detailed account of the difference between taxation arrangements applying to Super SA pensions (and ComSuper pensions) and most other superannuation pensions, and reason for the difference, is set out on the ‘Tax and Super SA pensions’ page.
The Association is pressing the State Treasurer to investigate the possibility of allowing members to opt for a pension that has the component funded from member contributions paid, and taxed, in the same way as most superannuation income. This will require a person to accept a reduction in the pension to meet the tax cost to the scheme of making the change and so the Association’s position is that this change must be voluntary for every member.
Matters being pursued with the Federal Government
1. Relaxation of the work test on super contributions to allow fully retired people aged over 65 to save through the superannuation system.
2. Separate taxation of non-superannuation income or age pension income to become non-taxable income. .
3. the valuation factor for defined benefit pensions in relation to the transfer balance cap to be age-related rather than the current value of 16 being applicable to all ages.
4. Indexation of Commonwealth pensions to be changed from Consumer Price Index (CPI )ndexation only to the better of CPI and the Pensioner and Beneficiary Living Cost Index (PBLCI).
5. Where after-tax,personal contributions by themselves are sufficient to create a tax-free componentfor a defined benefit pension greater than 10% of the pension’s gross value the 10% cap on the component of the pension not counted in the age pension income test should not apply.