How does it work in real life?
Of these 1.7 million employees, 571,575 individuals earn less than $37,001 a year. Currently the federal government contributes an annual lump sum payment (equal to 15 per cent of an individual's annual superannuation contributions) to a low income employee's super fund. However, from 1 July 2017 the lump sum payment will cease and the annual superannuation contributions of these same employees will be taxed at the rate of 15 per cent.
In 2012-13 there were also 183,975 non-employee individuals (or individuals receiving only a small proportion of income from work as an employee), with income derived from a personal business/self-employment, investments, government pensions/allowances, super, partnership/trust distributions, and/or a foreign source, who made personal superannuation contributions totalling $2.9 billion. These super contributions could be claimed as tax deductions.
Of these ‘non-employees’, 26,980 had annual taxable incomes of over $180,000 and made personal superannuation contributions totalling $603.07 million. Which equates to income of $22,352 per person per annum on which little or no tax is paid.
When will the Abbott Government address the imbalance in the national superannuation scheme, where the working poor are penalised and wealthy rewarded for their participation?
Some of Australia's richer citizens in 2012-13, not content with legally rorting the superannuation scheme, took their sense of entitlement to levels undreamed of by ordinary workers, as this observation in The Sydney Morning Herald on 30 April 2015 demonstrates: