Superannuation Tax Concessions
- The superannuation tax concessions are integral to the design of the Australian superannuation system.
- The concessional tax treatment of superannuation provides an incentive for people to save for their future retirement by deferring the use of their current income for future consumption in retirement.
- The tax concessions also compensate people for locking away their income for an extended period. Income can be inaccessible in superannuation for timeframes in excess of 40 years for many savers.
- Encouraging people to save for their retirement will reduce the need for people to rely on the Age Pension for income in retirement. This will reduce fiscal pressures on future governments.
- Critics of the superannuation tax concessions point to the high number of retirees still reliant on the Age Pension (either a full or part-pension). This ignores current retirees not having had the benefit of a mature superannuation system with both compulsory and voluntary contributions throughout the majority of their working life to build retirement savings.
At the time of publishing, the contents of this resource were accurate and correct.
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