The truth about "simpler super"

We all remember the night. May 9, 2006. A mid term budget. Nobody expected much. The usual, token tax cuts and rebates to families. We all expected the big announcements to come this year in a lead up to an election.

We saw Peter Costello with that usual smug look on his face to announce "the biggest change to superannuation that Australia has seen". And the ability for "average Australians to not need to pay for expensive financial planners to access their retirement benefits".

This was a huge change to superannuation. The biggest? Possibly not. I still believe the Superannuation Guarantee Scheme (SGC) implemented by the Hawke/Keating Government in 1992 was the biggest change to super we will ever see. However, there were some fundamental changes announced.

Some of these are:

• Tax free retirement benefits for those aged over 60.
• Abolition of Rasonable Benefits Limits.
• Funds are able to remain in the growth phase of super indefinitely.
• The assets test for social security benefits will be expanded to allow more people access to Social Security Entitlements.

This is just the tip of the iceberg. The major benefit that has been well and truly flogged by The Federal Government is the fact that retirement benefits will be tax free for those aged over 60. What they forgot to mention was that if you arrange your retirement benefits correctly, retirement benefits have always been primarily tax free for all but those who can afford to still pay tax! But that's a completely different issue.

I recently went to a course that discussed the budget changes. The general consensus to come from the course was, how did Costello sell this to us as 'simpler superannuation'? The changes are incredibly complex, especially the transitional rules which apply for about the next 5 years. Don't listen to the garbage that Costello sold us that there is now no need to see a financial planner! See an adviser and make sure you are maximising your retirement benefits.

I plan to use the following weeks to discuss some of these issues. Please contact me if there is anything in particular you would like to know more info about.

For more information, have a look at the Simpler Superannuation web site.