Save
Labor to exempt pensioners from dividend imputation changes
Citing a belief in a “fair go for pensioners”, Labor has announced both full and part pensioners will be exempt from its controversial proposal to scrap cash refunds on excess dividend imputation credits.
Labor to exempt pensioners from dividend imputation changes
Citing a belief in a “fair go for pensioners”, Labor has announced both full and part pensioners will be exempt from its controversial proposal to scrap cash refunds on excess dividend imputation credits.
The proposal to reform the dividend imputation system will exempt both part and full pensioners, shadow treasurer Chris Bowen has confirmed this morning.
Pensioners will be protected from the change by a "Pensioner Guarantee", as will SMSFs with at least one pensioner prior to 28 March 2018.
Commenting on the new guarantee, Mr Bowen said it reflected Labor's commitment to a "fair go for pensioners".
He said, "We know they are struggling with the cost of living, especially with out of control power prices and Turnbull’s cuts to Medicare.
"That’s why Labor is making sure pensioners will still be able to access cash refunds from excess dividend imputation credits.
"The Pensioner Guarantee means pensioners and allowance recipients will be protected from the abolition of cash refunds for excess dividend imputation credits when the policy commences in July 2019."
That means some 14,000 full and 200,000 part pensioners will be exempt from the policy Treasurer Scott Morrison has labelled a “tax grab”.
Speaking to Nest Egg last week, independent economist Saul Eslake said there were steps Labor could take to make the proposal more palatable for the retirees who could be negatively impacted.
He said, “There are a reasonably large number of people who may not appear to be particular well off, who may lose a little bit.
“Although for them, it may be a lot if they don't have much to begin with. Then, there's a much smaller group who have an awful lot at stake who are getting most of the benefit.”
Continuing, Mr Eslake said he wouldn’t blame retirees who were not rich, and who could be negatively impacted, for complaining.
With this in mind, he said, “The Labor Party hasn't said so, but there are things that Labor could do to modify its proposal that would help deal with the people who might genuinely be adversely affected that you wouldn't want to be.
“It would seem, from my standpoint, sensible for them to do it, and it wouldn't cost very much. If it's right that what they’re proposing will raise $5.5 billion per annum in revenue … assuming they’ve taken into account [last year’s changes to superannuation tax arrangements], looking after the people who you wouldn't want to make worse off, it shouldn't really cost any more than, say, between $250 and $500 million per annum.”
To Minister for Revenue and Financial Services Kelly O’Dwyer, the carve out reflects weak policy from Labor.
Speaking on Monday she said, “It’s extraordinary to think that Bill Shorten announced this policy and said it was a hit on millionaires. Then he needed to concede that there were 1.1 million Australians who would be directly impacted by Labor’s tax grab.”
Continuing, she reiterated that it would be the self-funded retirees, part pensioners, full pensioners and war widows that would be hit hardest.
RELATED ARTICLES
Tax saving
Navigating tax laws for capital gains in 2023
The landscape of Australian tax laws surrounding capital gains is ever-changing, with 2023 being no exception. Read more
Tax saving
What you need to know about the tax implications of crypto
One million Aussies are now invested in crypto, but many have not thought about how these investments will affect them at tax time. Read more
Tax saving
Welfare overhaul could give recipients a leg-up
Australia’s Centrelink recipients who’ve been doing it tough are in for a potentially easier time if the federal government pursues ambitious reforms that could provide sturdier safety nets. Read more
Tax saving
Students should think twice before tapping into their super
Former students might want to think carefully before they look to take advantage of the federal government’s biggest first home buyer incentive. Read more
Tax saving
Advocates call for an end to tax cuts
Social services sector advocates have warned that further tax cuts may make solving Australia’s biggest challenges much harder. Read more
Tax saving
ATO and AUSTRAC may gain new phone-tapping powers
A proposed update to electronic surveillance legislation could see the ATO armed with new powers that would allow the agency to bug phones and intercept online communications. Read more
Tax saving
Over 2m Aussies asked the TPB for help during the last year
As the economy recovers, Australia’s tax regulator says it’s planning to put unregistered practitioners under the microscope. Read more
Tax saving
Will you pay higher taxes due to bracket creep?
Bracket creep will see Australians paying more tax on average, unless further cuts are introduced in the future. Read more
Tax saving
Navigating tax laws for capital gains in 2023
The landscape of Australian tax laws surrounding capital gains is ever-changing, with 2023 being no exception. Read more
Tax saving
What you need to know about the tax implications of crypto
One million Aussies are now invested in crypto, but many have not thought about how these investments will affect them at tax time. Read more
Tax saving
Welfare overhaul could give recipients a leg-up
Australia’s Centrelink recipients who’ve been doing it tough are in for a potentially easier time if the federal government pursues ambitious reforms that could provide sturdier safety nets. Read more
Tax saving
Students should think twice before tapping into their super
Former students might want to think carefully before they look to take advantage of the federal government’s biggest first home buyer incentive. Read more
Tax saving
Advocates call for an end to tax cuts
Social services sector advocates have warned that further tax cuts may make solving Australia’s biggest challenges much harder. Read more
Tax saving
ATO and AUSTRAC may gain new phone-tapping powers
A proposed update to electronic surveillance legislation could see the ATO armed with new powers that would allow the agency to bug phones and intercept online communications. Read more
Tax saving
Over 2m Aussies asked the TPB for help during the last year
As the economy recovers, Australia’s tax regulator says it’s planning to put unregistered practitioners under the microscope. Read more
Tax saving
Will you pay higher taxes due to bracket creep?
Bracket creep will see Australians paying more tax on average, unless further cuts are introduced in the future. Read more
More articles
OUR PLATFORMS AND BRANDS
- Accountants Daily
- Accounting Times
- Adviser Innovation
- Australian Aviation
- Broker Daily
- Cyber Daily
- Defence Connect
- Fintech Business
- HR Leader
- Independent Financial Adviser
- Investment Centre
- Investor Daily
- Lawyers Weekly
- Money Management
- Nestegg
- Property Buzz
- Real Estate Business
- Smart Property Investment
- SMSF Adviser
- Space Connect
- Super Review
- The Adviser
- Wellness Daily
- World of Aviation
EVENTS AND SUMMITS
- Accountants Daily 30 Under 30 Awards
- Adviser Innovation Summit
- Australian Accounting Awards
- Australian Aviation Awards
- Australian Broking Awards
- Australian Defence Industry Awards
- Australian Law Awards
- Australian Space Awards
- Australian Space Summit
- Better Business Summit & Awards
- Broker Daily Business Awards
- Corporate Counsel Summit & Awards
- Cyber Security Summit & Awards
- Defence Connect Budget Lunch
- Defence Connect DSR Summit
- Fund Manager of the Year Awards
- ifa Excellence Awards
- ifa Future Forum
- Investor Daily ESG Summit
- Lawyers Weekly 30 Under 30 Awards
- Lawyers Weekly Women in Law Forum
- New Broker Academy
- Partner of the Year Awards
- REB Awards
- Reinnovate
- SME Broker Bootcamp
- SMSF Adviser Technical Day
- Super Fund of the Year Awards
- Women in Finance Awards
- Women in Law Awards
- Accountants Daily Podcast Network
- Australian Aviation Podcast Network
- Broker Daily Podcast Network
- Defence Connect Podcast Network
- HR Leader Podcast Network
- REB Podcast Network
- Relative Return
- Space Connect Podcast
- The Adviser Podcast Network
- The ifa Show
- The Lawyers Weekly Show
- The Smart Property Investment Show
PODCASTS
LEARNING AND EDUCATION
MOMENTUM MARKETS NETWORK
LINKS
STAY CONNECTED
Make your nest egg grow. Register now for nestegg updates.