There is a pressing need for self-managed super fund trustees to get professional advice in the wake of the 2015 Federal Budget, says Olivia Long, CEO of the SMSF administrators XpressSuper and SuperGuardian.
“The increases to the social security assets test will affect a sizeable number of SMSF trustees and members, and it is imperative those affected get professional advice,” she says.
Ms Long welcomes the Government commitment not to tinker with super, but notes there are an estimated 90,000 retirees who will lose their part pension.
“When you realise that an estimated 90,000 retirees will lose their part pension entirely, and nearly 250,000 will see their part pensions cut, then the enormity of the change for many SMSF trustees and members is evident.
“In essence, the assets-free threshold for homeowners rises to $250,000 for singles and $375,000 for couples from 2017, and the tapering rate rises from $150 to $300 per $1000 over the assets threshold.”
Long says that those trustees and members will need professional advice to understand how the changed will impact of them so they can put the right strategy in place.
“In particular, they should avoid any knee-jerk reactions such as moving their wealth from means-tested assets to non means-tested assets.
“The two key long-term goals of retirees of preserving capital and generating income should remain sacrosanct,” Long says. “These new policies will change how you achieve these two goals and that’s where you need professional advice.”
These changes to the social security assets test, estimated to collect $2.4 billion for the Government’s coffers over five years, were widely mooted before the budget.
Source: Xpress Super/SuperGuardian