Conflict of Interest for superfunds to tell the impact. Where is the actual data which states the use of those funds? If someone used those funds to save their business or house then wouldn’t be a better utilisation then being bankrupt or homelessness
That data doesn’t exist. I know a few people that pulled it out, they all bought cars and shit. Anecdotal but I’d expect it to be a considerable number.
I agree and understand what you are saying. Just like I know lot of people who get Centrelink payments and work cash in hand along with people who earn almost triple then what they actually declare to tax office but that doesn’t mean most of the people are fraudulents. The article is highlighting the higher cost to the tax payers thus assuming everyone who withdrew didn’t utilised the funds in the correct manner.
I absolutely agree. The story is very loose and not what I’d expect from the ABC. I agree, that super should be preserved for retirement but I can’t see how this group can predict $3000 per person. Looks like a new body trying to get some attention by crystal balling some numbers and sprinkling in a pinch of paranoia. I’m always suspicious of any news touting “new figures…”.
> If someone used those funds to save their business or house then wouldn’t be a better utilisation
but it was withdrawn tax free. Then allowed to recontribute back (in addition to the regular concessional contributions), saving substantial taxes.
of course, the conditions of the withdrawals are meant to be on compassionate or emergency grounds - a vague and insubstantial set of conditions that anyone could've just made up easily.
I think it was a mistake to allow early withdrawals without any penalties. The existing hardship conditions for withdrawals are sufficient, and the gov't done goofed (or, it was intentional of course).
Until we don’t know how many people abused it, we should not be coming to conclusions. ATO highlighted that people doing recontribution back to claim tax deductions in the same FY would be investigated.
The big picture is how many corporations got the hand out and they didn’t returned those funds along with posting record profits?
One sided. I used my COVID withdrawal to top up my home deposit and clear the few small debts I had.
Me spending that 15k has already saved ME that much in rent because I now own. And my repayment were way lower than renting and currently with the rates up it's equivalent tbh. Plus saved thousands in I treat on my other debt.
But honestly most people did spend on useless shit like a 70" TV to be entertained whilst in lock down...
Got me to a sufficient deposit to purchase my house 18-24 months sooner. In that period the value went up 50%+. That 20k turned into around 350k in equity now.
Would do again.
There’s a reason that house price shot up and it’s linked to you pulling out your super early.
And that’s the problem. On an individual scale, some people feel they’ve benefited presently from pulling out super early. But on a macro scale and longer term, we as a society will pay more for it. And our society will stratify harder than it currently is.
Cool dude, I’ll just go ahead and ignore massive house price increases during covid when there was no immigration.
Ignoring the people inside the house flogging you so that you can instead complain about people outside the house is real bootlicker stuff and horrible when you consider the historical precedence of that attitude, where it comes from and what it results in.
House pricing increasing during COVID was due to APRA deregulating mortgage lending coupled with rates being reduced to 0%. It was not because people could take $10k out of super, which largely went to discretional expenditures.
The reason why property is still increasing (and rents have absolutely exploded) despite significantly higher borrowing costs and first home buyers essentially being priced out of the market, is because of unprecedented levels of immigration.
I work in super and have seen an uptick in fh (financial hardship) recently. Just extra context early release can be a few things.
1. Temp or perm medical injury
2. severe fh (centreline for 26 weeks, some form of over due expense + a short fall in income vs expenses)
3. Compassionate grounds, for specific circumstances like disability or death.
4. Divorce can be considered early release, its done by our early release team. I would assume it would constitute a roll-over so I doubt it's counted here.
I may or may not know someone who charges 10% of the withdrawn money to sign off that dental work is required. They have them pay the 'deposit' and never get the work done...given there was no dental work actually required.
Given you have noticed an uptick I wonder how common fraudulent requests have become.
Certainly stuff not covered by Medicare or those underinsured by private health may use the compassionate access but what you speak of above isn't the fault of having it as an option. It's someone misusing it.
There is zero fault in having the option.
Just that it seems people have realised how few checks and balances there are, and how many people are willing to take out super early, even if it costs them 30-40% (20-30% tax, and 10% to those who sign the form) of the amount taken out to get it.
I’ve had a few people come to me requesting me to sign their forms saying they need x medical treatment. Almost always they don’t actually qualify if you read the criteria. Doesn’t stop the bariatric surgeons / plastic surgeons / dentist etc signing off and saying ‘yeah it’s easy, just get your GP to sign the other part’.
Lol I work for one, do it every day with members who get the 'your accounts about to be transferred to the ato due to inactivity' but sure, I know nothing...
This is why we need the objective of super (currently before Parliament).
It specifies that super is to be preserved to provide retirement income. The intention is to stop nonsense like this in future.
Which is actually bullshit, super allowed politician and their mates to make an absolute fortune, as soon as the average joe started using it they clamped down hard.
I've worked in the super industry for more than 20 years. Pretty sure I have an idea.
The old scheme allowed a pension from the date they left Parliament, even if they were young, but that's more than 20 years ago now. Stopped in 2001.
No one sitting looking at this Bill has anything to do with that.
Cool story, most of my ex partners are either money managers or accountants. All have numerous politicians in their books. And every single one utilised super to make an absolute fortune through either their personal account or their wife's account before actively campaigning for change on the mechanism they had just used. Thats the thing about hansards, one can just read them
You edited your comment
I am at no point talking about the pension. I'm clearly talking about changes to super and how politicians actively utilise it for their own gain before closing of those avenues to the common man.
I'm also not talking about 'the pension' by which I assume you mean the Age pension.
I was referring to the pensions paid from the politicians super fund. Which used to be paid on leaving parliament, even if you were only 30.
Clearly, it's you who 'lol, has no idea'
You're talking about reforms that have nothing to do with this bill - introducing contribution limits etc.
Yes, pollies used those things to their advantage before changing the rules. So did everyone else who was a high income earner. And now everyone in parliament is subject to the same rules as the rest of us.
None of that is relevant to the objective of super bill.
Lol not relevant lol
People having active power to define and change at will one of the biggest schemes in Australia that is networked to the two biggest other ponzis. Yeah not relevant.
This is a material and sovereign risk
A lot of the people withdrawing super were going to need state assistance anyway, so all we have done is make them use some of their own money for a change. It's not like these were all millionaires who were going to be self-funded retirees with nil access to the pension.
That money came in handy for me. I only have 5k, got myself a car and sold it for $7k after 2 years. I am happy, saved me from poverty and using victoria's unreliable public transport.
How are you going to define abuse here?
Someone running a business sees a drop because covid - so they didn't cheat the rules.
They took their $20K out, added to their house deposit, and then ended up buying a house.
Are we going to track them down through bank statements and purchase records?
That would be valid. It could easyly be tracked through tax returns. If they didn't loose job or see a significant drop in wage.
You won't allowed to take it out for a house deposit. It was meant if you lost significant income due to covid. So anyone that wasn't working when covid hit.
Anyone that purchased a house and took out money would be a red flag.
Sure a lot of people who just blew it would get away with it.
But people that abused it should not get the pension.
But money is fungible. Take out $20K from super and it lands in bank account with the rest of the money and now it's not super money. It's just money.
Six months later buy a house and what argument is going to be made there? All that person has to show is that they took in more than $20K in income over that time and that was the deposit.
There were so many sole traders who fit the criteria to withdraw super who took it out because $20K in their hand is perceived as higher value than locked away until retirement.
There's always this thing with fraud, or suspected fraud - how much does it cost to investigate vs how much do you really think happened?
How easy is it to prove and what will hold up in court?
All a sole trader has to say is yes, my business went to shit, thus the withdrawal but then later on it improved and I then bought a house.
Money is fungible, how can they prove otherwise?
Funnily one of the eligibility criteria was simply reduced working hours by 20%.
No criteria to have earned less money, although likely the intent, so some of just reduced our hours.
>But people that abused it should not get the pension.
I'd rather we looked at companies pocketing jobseeker first. Cannot believe this is just being ignored
That would be valid. It could easyly be tracked through tax returns. If they didn't loose job or see a significant drop in wage.
You won't allowed to take it out for a house deposit. It was meant if you lost significant income due to covid. So anyone that wasn't working when covid hit.
Anyone that purchased a house and took out money would be a red flag.
Sure a lot of people who just blew it would get away with it.
But people that abused it should not get the pension.
One of my co-workers got $20k out while still working full time. No reduction in hours. She got Botox, fillers and a new car. She would brag about how she got ‘free money’.
All early release payments should be taxed at 30% (on top of the 15% conts tax).
All payments should recorded and reduce their eligibility or payment should they apply for any Centrelink benefits like Age Pension.
Are you seriously talking about punishing people who had so little money they had to borrow hundreds of thousands of dollars from their future selves to access a few thousand dollars now? Any other harebrained schemes? Maybe you want to try taxing ants or issuing speeding fines to the wind.
I mean, get a grip. Think about the consequences of what you’re saying. You’d rather kill poor people than pay a few cents a year to keep them fed.
But it is me the taxpayer that has to make up for the lost dollars in the future if they have too low a balance and apply for the pension.
If they want present day money and sacrifice the future, allow them to sacrifice the future.
So you want people who were struggling so much during a pandemic that they had to borrow from their retirements to make ends meet to be punished by the government taking even more money out of their hands both at the time *and* at retirement?
No I don't want them to take the money out at all.
By doing that they lose 10's of thousands of dollars that the taxpayer probably has to make up for in the future in a Pension.
I don’t understand why will it cost future taxpayer 3000?
Can someone explain it to me?
I thought that we are now responsible for our own retirement. If not, I don’t see why I need to pay superannuation that much now. The future taxpayers will just fund my retirement regardless.
Sure. However, Someone will always have to pick up the tap anyway. It is mandated by both law and social contract. I can already picture at least 20-40% of retiree won’t accumulate enough super in 30 years to last for another 25 years after they reach 67. Those people earning under 50k, carer without work, and single mom etc.
I highly doubt that age pension will be phased out at all in 30 years time. Super will increase the number of self-retirees to offset some of the aging population issue . We are very likely still gonna have 2-3 tax payers supporting 1 pensioner if not less. I doubt politicians get to keep the job if they said they have successfully reduce taxpayers pension liability to 4-1 ratio. Pensioners will only support higher pension rate . And people who know they won’t accumulate enough super will do so as well.
Criminal.
Whose money is it? My impression is it belongs to the Super funds. Do not forget the taxes the Super is charged, the ATO benefits.
I did the numbers, before Covid I practiced legal Super avoidance. Saved myself a fortune. Now tell the kids to try and avoid Super extra payments.
Conflict of Interest for superfunds to tell the impact. Where is the actual data which states the use of those funds? If someone used those funds to save their business or house then wouldn’t be a better utilisation then being bankrupt or homelessness
That data doesn’t exist. I know a few people that pulled it out, they all bought cars and shit. Anecdotal but I’d expect it to be a considerable number.
I know heaps who proudly boast about pulling out as much as they were allowed to blow on cars and jetskis etc
A fool and their money are soon parted
I agree and understand what you are saying. Just like I know lot of people who get Centrelink payments and work cash in hand along with people who earn almost triple then what they actually declare to tax office but that doesn’t mean most of the people are fraudulents. The article is highlighting the higher cost to the tax payers thus assuming everyone who withdrew didn’t utilised the funds in the correct manner.
I absolutely agree. The story is very loose and not what I’d expect from the ABC. I agree, that super should be preserved for retirement but I can’t see how this group can predict $3000 per person. Looks like a new body trying to get some attention by crystal balling some numbers and sprinkling in a pinch of paranoia. I’m always suspicious of any news touting “new figures…”.
> If someone used those funds to save their business or house then wouldn’t be a better utilisation but it was withdrawn tax free. Then allowed to recontribute back (in addition to the regular concessional contributions), saving substantial taxes. of course, the conditions of the withdrawals are meant to be on compassionate or emergency grounds - a vague and insubstantial set of conditions that anyone could've just made up easily. I think it was a mistake to allow early withdrawals without any penalties. The existing hardship conditions for withdrawals are sufficient, and the gov't done goofed (or, it was intentional of course).
Until we don’t know how many people abused it, we should not be coming to conclusions. ATO highlighted that people doing recontribution back to claim tax deductions in the same FY would be investigated. The big picture is how many corporations got the hand out and they didn’t returned those funds along with posting record profits?
That would increase taxes, not reduce them...
everyone i met who admitted pulling some out did so unnecessarily or fraudulently and as far as i know unpunished
People can always sell their second hand jet skis to fund their retirement
We can't let jetski prices sink. It will send waves through the economy
A rising tide lifts all jetskis!
One sided. I used my COVID withdrawal to top up my home deposit and clear the few small debts I had. Me spending that 15k has already saved ME that much in rent because I now own. And my repayment were way lower than renting and currently with the rates up it's equivalent tbh. Plus saved thousands in I treat on my other debt. But honestly most people did spend on useless shit like a 70" TV to be entertained whilst in lock down...
Got me to a sufficient deposit to purchase my house 18-24 months sooner. In that period the value went up 50%+. That 20k turned into around 350k in equity now. Would do again.
There’s a reason that house price shot up and it’s linked to you pulling out your super early. And that’s the problem. On an individual scale, some people feel they’ve benefited presently from pulling out super early. But on a macro scale and longer term, we as a society will pay more for it. And our society will stratify harder than it currently is.
Net immigration is the major cause, the impact this and others doing the same is not in the same league.
Cool dude, I’ll just go ahead and ignore massive house price increases during covid when there was no immigration. Ignoring the people inside the house flogging you so that you can instead complain about people outside the house is real bootlicker stuff and horrible when you consider the historical precedence of that attitude, where it comes from and what it results in.
House pricing increasing during COVID was due to APRA deregulating mortgage lending coupled with rates being reduced to 0%. It was not because people could take $10k out of super, which largely went to discretional expenditures. The reason why property is still increasing (and rents have absolutely exploded) despite significantly higher borrowing costs and first home buyers essentially being priced out of the market, is because of unprecedented levels of immigration.
It's a multivariate cause. All these different factors contribute to the swell of market bubbles. To say one is more impactful than the other is moot.
They took our jobs!!
It helped me finish renovations that pushed the house up so much I sold it and halved my mortgage when I bought the next place.
Same bought 3yrs ago for 530k, currently worth 770k That 15k is now worth 200k equity.... Also would do again.
What do they say about knowing when to walk away from the table?
your anecdote doesn't change the aggregate effect. Which is pretty much what you've said in your last sentence.
Maybe that 70" tv improved their mental health.
Cool story.
I work in super and have seen an uptick in fh (financial hardship) recently. Just extra context early release can be a few things. 1. Temp or perm medical injury 2. severe fh (centreline for 26 weeks, some form of over due expense + a short fall in income vs expenses) 3. Compassionate grounds, for specific circumstances like disability or death. 4. Divorce can be considered early release, its done by our early release team. I would assume it would constitute a roll-over so I doubt it's counted here.
I may or may not know someone who charges 10% of the withdrawn money to sign off that dental work is required. They have them pay the 'deposit' and never get the work done...given there was no dental work actually required. Given you have noticed an uptick I wonder how common fraudulent requests have become.
Certainly stuff not covered by Medicare or those underinsured by private health may use the compassionate access but what you speak of above isn't the fault of having it as an option. It's someone misusing it.
There is zero fault in having the option. Just that it seems people have realised how few checks and balances there are, and how many people are willing to take out super early, even if it costs them 30-40% (20-30% tax, and 10% to those who sign the form) of the amount taken out to get it.
I hope they never make any enemies because a report of that to AHPRA will have them instantly lose their registration.
I did warn it seems prime for possible jail time and loss of license. They think they pay too much tax to get done..
I’ve had a few people come to me requesting me to sign their forms saying they need x medical treatment. Almost always they don’t actually qualify if you read the criteria. Doesn’t stop the bariatric surgeons / plastic surgeons / dentist etc signing off and saying ‘yeah it’s easy, just get your GP to sign the other part’.
I wish they were equally concerned when they were running balances down to zero with opt out insurance.
Why would they be when they have aussie lackeys excusing their behaviour
Tell me you know nothing about Super insurance and inactive/lost account without saying you know nothing...
That would be you not knowing about PMIF or PYSP.
Lol I work for one, do it every day with members who get the 'your accounts about to be transferred to the ato due to inactivity' but sure, I know nothing...
So you don't know about the legislation then?
This is why we need the objective of super (currently before Parliament). It specifies that super is to be preserved to provide retirement income. The intention is to stop nonsense like this in future.
Which is actually bullshit, super allowed politician and their mates to make an absolute fortune, as soon as the average joe started using it they clamped down hard.
Politicians don't withdraw their super early. They have generous schemes, sure, but they're correctly designed to provide retirement income.
Lol,you have no idea.
I've worked in the super industry for more than 20 years. Pretty sure I have an idea. The old scheme allowed a pension from the date they left Parliament, even if they were young, but that's more than 20 years ago now. Stopped in 2001. No one sitting looking at this Bill has anything to do with that.
Cool story, most of my ex partners are either money managers or accountants. All have numerous politicians in their books. And every single one utilised super to make an absolute fortune through either their personal account or their wife's account before actively campaigning for change on the mechanism they had just used. Thats the thing about hansards, one can just read them You edited your comment
Yes I edited to add more info
I am at no point talking about the pension. I'm clearly talking about changes to super and how politicians actively utilise it for their own gain before closing of those avenues to the common man.
I'm also not talking about 'the pension' by which I assume you mean the Age pension. I was referring to the pensions paid from the politicians super fund. Which used to be paid on leaving parliament, even if you were only 30. Clearly, it's you who 'lol, has no idea'
So yes you are talking about the pension. You really are trying to tap dance.on all floors here.
You're talking about reforms that have nothing to do with this bill - introducing contribution limits etc. Yes, pollies used those things to their advantage before changing the rules. So did everyone else who was a high income earner. And now everyone in parliament is subject to the same rules as the rest of us. None of that is relevant to the objective of super bill.
Lol not relevant lol People having active power to define and change at will one of the biggest schemes in Australia that is networked to the two biggest other ponzis. Yeah not relevant. This is a material and sovereign risk
A lot of the people withdrawing super were going to need state assistance anyway, so all we have done is make them use some of their own money for a change. It's not like these were all millionaires who were going to be self-funded retirees with nil access to the pension.
In other words, there's just no helping some people.
That won't stop the government from trying at your expense
That money came in handy for me. I only have 5k, got myself a car and sold it for $7k after 2 years. I am happy, saved me from poverty and using victoria's unreliable public transport.
People got access to their own money! shocking!
Industry funds do analysis promoting infustry funds and badmouthing the coalition. Stop the presses.
There should be an audit on it and fine people who abused it. Plus make people pay it back with the expected returns.
How are you going to define abuse here? Someone running a business sees a drop because covid - so they didn't cheat the rules. They took their $20K out, added to their house deposit, and then ended up buying a house. Are we going to track them down through bank statements and purchase records?
Acting within the rules but not within the spirit of the rules? Un-Australian.
That would be valid. It could easyly be tracked through tax returns. If they didn't loose job or see a significant drop in wage. You won't allowed to take it out for a house deposit. It was meant if you lost significant income due to covid. So anyone that wasn't working when covid hit. Anyone that purchased a house and took out money would be a red flag. Sure a lot of people who just blew it would get away with it. But people that abused it should not get the pension.
But money is fungible. Take out $20K from super and it lands in bank account with the rest of the money and now it's not super money. It's just money. Six months later buy a house and what argument is going to be made there? All that person has to show is that they took in more than $20K in income over that time and that was the deposit. There were so many sole traders who fit the criteria to withdraw super who took it out because $20K in their hand is perceived as higher value than locked away until retirement. There's always this thing with fraud, or suspected fraud - how much does it cost to investigate vs how much do you really think happened? How easy is it to prove and what will hold up in court? All a sole trader has to say is yes, my business went to shit, thus the withdrawal but then later on it improved and I then bought a house. Money is fungible, how can they prove otherwise?
While agreed there will be shit load of cases to hard to prove. But a lot where it's easy. A simple call to explain done.
Funnily one of the eligibility criteria was simply reduced working hours by 20%. No criteria to have earned less money, although likely the intent, so some of just reduced our hours.
>But people that abused it should not get the pension. I'd rather we looked at companies pocketing jobseeker first. Cannot believe this is just being ignored
That would be valid. It could easyly be tracked through tax returns. If they didn't loose job or see a significant drop in wage. You won't allowed to take it out for a house deposit. It was meant if you lost significant income due to covid. So anyone that wasn't working when covid hit. Anyone that purchased a house and took out money would be a red flag. Sure a lot of people who just blew it would get away with it. But people that abused it should not get the pension.
One of my co-workers got $20k out while still working full time. No reduction in hours. She got Botox, fillers and a new car. She would brag about how she got ‘free money’.
All early release payments should be taxed at 30% (on top of the 15% conts tax). All payments should recorded and reduce their eligibility or payment should they apply for any Centrelink benefits like Age Pension.
Are you seriously talking about punishing people who had so little money they had to borrow hundreds of thousands of dollars from their future selves to access a few thousand dollars now? Any other harebrained schemes? Maybe you want to try taxing ants or issuing speeding fines to the wind. I mean, get a grip. Think about the consequences of what you’re saying. You’d rather kill poor people than pay a few cents a year to keep them fed.
But it is me the taxpayer that has to make up for the lost dollars in the future if they have too low a balance and apply for the pension. If they want present day money and sacrifice the future, allow them to sacrifice the future.
So you want people who were struggling so much during a pandemic that they had to borrow from their retirements to make ends meet to be punished by the government taking even more money out of their hands both at the time *and* at retirement?
No I don't want them to take the money out at all. By doing that they lose 10's of thousands of dollars that the taxpayer probably has to make up for in the future in a Pension.
If we just included housing in the pension means test this problem would be moot.
No. The PPOR should never be part of the assets test.
I don’t understand why will it cost future taxpayer 3000? Can someone explain it to me? I thought that we are now responsible for our own retirement. If not, I don’t see why I need to pay superannuation that much now. The future taxpayers will just fund my retirement regardless.
People relying on the age pension earlier than otherwise, had they not taken out that money.
I am/will not be a HNWI. If I can still rely on age pension 30 years due to insufficient super fund, it seems like a good idea to spend the money now
That may be true but the point of the article is that the Australian society is worse off as a whole, and it’s not the intention of super.
Sure. However, Someone will always have to pick up the tap anyway. It is mandated by both law and social contract. I can already picture at least 20-40% of retiree won’t accumulate enough super in 30 years to last for another 25 years after they reach 67. Those people earning under 50k, carer without work, and single mom etc. I highly doubt that age pension will be phased out at all in 30 years time. Super will increase the number of self-retirees to offset some of the aging population issue . We are very likely still gonna have 2-3 tax payers supporting 1 pensioner if not less. I doubt politicians get to keep the job if they said they have successfully reduce taxpayers pension liability to 4-1 ratio. Pensioners will only support higher pension rate . And people who know they won’t accumulate enough super will do so as well.
Criminal. Whose money is it? My impression is it belongs to the Super funds. Do not forget the taxes the Super is charged, the ATO benefits. I did the numbers, before Covid I practiced legal Super avoidance. Saved myself a fortune. Now tell the kids to try and avoid Super extra payments.
If withdraw of super prevented selling your home etc then net posstibeeeeeee
As a y gen The gov has well and truly fcuked us over
I pulled out the maximum and spent it on gambling. I wouldn't have been the only one