Super and social benefits – why the inconsistency?

June 5, 2025

The superannuation changes proposed by Dr Jim Chalmers, if carried, would result in taxation on earnings of superannuation accounts holding over $3 million dollars in assets.

The tax-transfer system in general is based on the household unit. The proposed changes would mean that a household with two superannuation accounts would be subject to a super account tax threshold of $6 million, whereas a household of two sharing one superannuation account would be subject to a threshold of $3 million.

This is not how the welfare system, or the pension system, works. Centrelink is absolutely rigid about enforcing household eligibility to access comparatively meagre social benefits. Why the lack of consistency?

If the objective is to discourage people from passing on their accumulated superannuation as inheritance, the changes proposed will do very little to meet this objective in many cases. Furthermore, it is likely to exacerbate wealth inequality in general, and among retirees in particular.

I am not a rich old man, but a retired one-person household whose super is unlikely to ever reach the $3 million threshold. Nonetheless, I believe good policy should meet the test of equity and social justice. Clearly, what is intended does not.