Labor Scaremongering on Superannuation Benefits for Defence Force Personnel - 11 Apr 2007

Media Release

Hon Helen Coonan

Assistant Federal Treasurer

Labor has today been caught out propagating unsubstantiated rumours that some Australian Defence Force personnel may be forced to pay more tax under regulations being drafted by Treasury to accompany the new Simplified Super reforms commencing on 1 July 2007.

These rumours are absolutely not true.

If Laborís spokesperson on this issue, Alan Griffin, had been serious about easing concerns amongst ADF personnel he would have contacted my office to learn the truth, rather than issuing statements designed to score cheap political points.

In February 2007 the Parliament passed the Governmentís Simplified Superannuation reforms.

Labor has sought to scaremonger on speculation that the new Regulations to accompany some aspects of the reforms will mean that members of the Defence Force Retirement and Death Benefits (DFRDB) Scheme will have to pay significantly more tax on any commuted lump sum benefits that they may receive on retirement after 1 July 2007.

This unsubstantiated speculation is just not true.

These Regulations will not change existing benefit options currently available to DFRDB members or the tax treatment of any commuted lump sum benefit from 1 July 2007. From age 60, members will also benefit from lower tax rates on their lump sum benefits and a 10 per cent tax offset on their pensions from an untaxed source.”

The Government expects the final regulations will be registered and available to public shortly.

The only real uncertainty facing all Australians regarding superannuation is Laborís failure to say whether or not it will follow the direction of their Union bosses and restore the 15% tax on super benefits.

Media Contact:
Brad Emery
(02) 6277 7360 or 0414 225 638

Comment by APPVA National President, Paul Copeland:

If what the Minister states is true, then why is it posted onto the Treasury website? Why is Defence unable to state whether or not this Legislation is going to be an exemption clause for DFRDB members? Why has the Government been silent on this matter when the Members of the ADF need a cast iron guarantee that they will not be one cent worse off under this new Superannuation Law? They need answers NOW, and with 2 ½ months left to the implementation, the Government needs to allay the fears of DFRDB members in the ADF.

Members of the DFRDB have also been informed of these proposed tax changes by COMSUPER – of which there has been no reassurance that this will not be applicable to DFRDB members.

In contrast to the Assistant Treasurer’s Media Release, it is in black and white on his website, that this 30% tax is going to occur 1 July 07.

Please see the link below for more information;

Employment Termination Payments