How much more will the superannuation tax cost you?
The Nationals have vowed to 'fight to the death' to stop Labor's plans to increase tax on big superannuation accounts. The Liberals have claimed the plan delivers special treatment to politicians such as the prime minister who have older defined benefit superannuation.
But Treasurer Jim Chalmers has trashed those criticisms, saying it's a 'modest' change aimed at making super more sustainable.
The legislation to double the tax rate on earnings from super balances over $3 million from 15 per cent to 30 per cent will be among the first on Labor's agenda when parliament returns in July, but if you're still a bit confused, you're not alone.
Below, we show what will happen for Australians who will be hit by the tax – and how much more they'll pay, drawing on calculations by the Association of Superannuation Funds of Australia.
With the Coalition set against the change, and Labor needing to secure the support of the Greens to get its bill through, the exact form of the tax is yet to be confirmed.
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Earnings on all superannuation accounts will continue to be taxed at 15 per cent, but we do not include this in our examples because they require their own set of calculations with changes based on personal circumstances. Our examples just show the extra 15 per cent that will be levied on earnings from accounts over $3 million.
But what does all this look like in practice? And how would the tax change affect you?
Using four examples, we step through the way the new, additional tax bill would be calculated for a range of people in different occupations and life stages. We only examine the effect of the tax over the first year, and do not look into the number of Australians affected over time.
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