The Association of Superannuation Funds Australia (ASFA) has today released new research showing that wealthy retirees are collecting $10 billion worth of income tax free, courtesy of the Howard Government’s short-sighted decision in 2006 to scrap taxes on the retirement income from super.
According to this report, there are over 200,000 people who have superannuation account balances in excess of $1 million, with around 70,000 with balances in excess of $2.5 million.
Within these, there are 24,000 self-managed superannuation fund (SMSF) members in the pension phase with balances in excess of $2 million that are receiving around $5.2 billion in tax-free income stream payments, or an average of around $216,000 a year.
A further 51,700 retirees with balances between $1m and $2m are receiving $4.9 billion a year tax-free income streams, or an average of around $93,000 per year.
Chalk this up as another Howard Government blunder with major long-term implications for the Budget and inter-generational equity.