Tax free pensions... until you die

The most well documented aspect of the super changes. From next Financial Year, Pensions paid from super and lump sum super withdrawals will be tax free if you're aged over 60. However, this isn't where tax in super ends. There is another tax, the "death tax" when the 'taxable' components of pensions/super are paid to non-dependants when someone dies, they are taxed at 15%.

Now, the definition of a dependant in this case is basically spouse or dependant child, under age 18, which generally means that those of us who have Boomer parents transferring their assets into super, are not going to see everything when our parents unfortunately, but inevitably depart this fine planet.

However, given that super benefits can be withdrawn tax free over 60, those who unfortunately die slowly, are able to withdraw their entire super benefits before they die. However, those who probably more fortunately die quickly do not get this opportunity.

This needs to be changed. Time for the Government to remove this 15% death tax. On one hand they are trying to make people put as much as they can into super, but aren't providing the estate planning benefits. Assets held outside of super can be transferred to non-dependants with no tax liability (however the recipient inherits the original purchase date & price).

John Howard and Peter Costello, time to provide something for us younger generation. The generation who's vote doesn't seem to be important to you. You can't buy our vote on the low interest rate lie this election.

Until then, the benefit of a slow and painful death will only be the tax savings one can provide to their children.