Morrison bribes seniors with new superannuation lurks

The 2017 Federal Budget included the below measure aimed at encouraging seniors to downsize from their large homes to free-up housing for Australian families:

Superannuation downsizing policy

The Coalition’s superannuation downsizing policy announced in the 2017 Federal Budget.

Tomorrow night’s Federal Budget will reportedly extend the eligibility to the scheme to people aged 60.

The Budget will also reportedly abolish the work test that applies to superannuation contributions made by people aged between 67 and 74:

The abolition of the work test will, Mr Frydenberg said, remove the complexities that have limited the ability of retirees to top up their super and acted as a disincentive to pursue flexible work.

The work test requires a person to be gainfully employed for at least 40 hours in a consecutive 30-day period during the financial year before concessional or non-concessional contributions can be made.

Under the change, the work test will be abolished on July 1, 2022, after which retirees aged between 67 and 74 can top up their super as they wish, without having to satisfy any test.

Older Australians are obviously a key constituent of the Coalition. They explicitly targeted these voters last election by opposing Labor’s franking credit and negative gearing reforms.

At the margin, these reforms will allow older Australians to shelter themselves from paying tax. It is a throwback to the Peter Costello Budgets under the Howard Government, which lavished baby boomers with superannuation lurks.

Unconventional Economist
Latest posts by Unconventional Economist (see all)


  1. RobotSenseiMEMBER

    The Liberals are slowly going GOP and making themselves unelectable to a generation who won’t forget the pork-barreling and debt-saddling this government has performed.

    • MathiasMEMBER

      I wouldnt be surprised if Woman vote for them.

      Woman always want Men to work harder and give them more money for free.

      At this rate, I think we are looking at 20 years of divorce rates.

      • I think everyone wants men to work harder and give them something for free. Being a woman is not barrier to profiting off the work of others. Haven’t men led the way on that?

      • Good on you Mathias, where would any discussion of government policy be without some misogyny. Are you a lurking MP?

    • kierans777MEMBER

      The generation will forget. Because the MSM will continue to spruik for the Liberals. Last night’s 7:30 started again on the “Liberals strength is the economy” bollocks. It doesn’t matter how much alleged rape, sexual assaults, pork barrelling, corruption, incompetence, etc that the Liberals engage in, if the MSM refuses to report correctly and honestly at critical moments like elections or budgets.

  2. The downsizing isn’t the worst. Yes, it means more assets can be sheltered in super but it was already sheltered as part of the PPR. What the downsizing does mean is that it is harder for those retirees to get the Aged Pension because superannuation is an asset for assets purposes whereas the PPR isn’t.

    Plus it frees up larger dwellings plus the state will get stamp duty.

    • This is a good pick up Jason …

      Putting in super is a good rort – but if you are on the cusp of being Aged Pension eligible then you wouldn’t do it.

      That said, there is a slew of “self funded” boomers who are nowhere near aged pension eligibility anyways who may be able to take advantage of this rort. Again, giving a free kick to some who don’t need a free kick.

      • If you take the view that they weren’t paying tax anyway on the capital locked up in the home, then the overall outcome is OK I think.


      Couple, homeowner with $400k in fin assets (assessable) will see a full Age Pension of $37,341 / year (combined).

      Drop in $300k each for the ‘downsizer’ strategy the Mo is advocating and that Age Pension craters to ‘nawtheen for you.’
      Will be very popular I’m sure! (dumb as chit)

      Of course, if you can generate $37,314 (6.2% net) on your $600k super, you’re breaking even but gonna be hard to do when the best term deposit in the country is paying 0.3% ($1800/year)

  3. Ooh. This is interesting. I have been trying to get my folks to downsize for a while. My old man loves a tax lurk so this might work.
    [they, like many boomers others claim they will be leaving their 4 bed home in a box]

    • happy valleyMEMBER

      Read Jason’s comment above. Beware federal LNP pollies bearing “gifts” – they’d do virtually anything to stay in power?

  4. peterbruceMEMBER

    That chart behind your “lavished boomers” link is excellent. It demonstrates very clearly the shocking distortion of Super concessions in favour of the wealthy. A chart that used to be shown here whenever Super was discussed. (As that 2016 article demonstrates). I wonder why we don’t get to see it on a regular basis anymore? It is a pity because it is simple, clear, and concise and would educate others as it did me.

    • To be fair, since that 2016 chart, Div 293 kicks in at a lower level (250k although 200k has been discussed) and those earning less than 18k do get a rebate so they aren’t worse off.

      But the overall point still stands.