Unexpected pay rise coming your way

     June 22, 2014
     NEWS.com.au

Millions of Australians are set to get a hidden pay rise on July 1 via their superannuation.          

WOULDN’T it be great to land a pay rise without even asking for one? You are about to next week.

Millions of Australians are set to get a hidden pay rise from next week, when their compulsory superannuation payments are fattened from July 1, putting more money into their retirement purse.      

The rise to the superannuation guarantee (SG) will result in employees getting an additional 0.25 per cent superannuation — climbing to 9.5 per cent — dropped into their super kitty.

That’s an extra $10,713 for a 35 year old salary earner on $80,000 a year, and almost $19,000 if they are on $150,000. See below for more pay rise scenarios.

But while it is your money, the catch is that you cannot access it until retirement, and for workers on a package, the amount will come out of their take-home pay.

For most Australians the SG increase will not affect their take-home pay, but the Australian Institute of Superannuation Trustees’ chief executive, Tom Garcia, says the way workers will receive it will vary among employers.

“It depends on how your employment situation is set up. It will be a mix — for some it will come out of your take-home pay if you’re paid a package,’’ he says.

“If you are entitled to a wage increase then part of it can end up being this increase in the super guarantee.”

Garcia urges Australians to either check with their super fund to see if they are getting the increase or to find out how the 9.5 per cent calculation is going to be made.          

He also says it pays to check annual super statements to make sure the correct super payments have been paid.

Australians are also being urged to take note of the super contribution caps so they don’t get pinged for making payments that exceed the cap.

The concessional super caps are scheduled to rise on July 1 from $25,000 to $30,000 for Australians aged below 49 on June 30, 2014.

For those aged 49 years or over as of June 30 this year the concessional contributions cap is $35,000 — up from $30,000.

The non-concessional contributions cap will increase from $150,000 to $180,000.

Shadforth Financial Group head of advice John Barton says people should closely examine how much extra is contributed to ensure they don’t get slugged with penalties.

“You need to make sure don’t go over the cap and end up paying excess tax,’’ he says.

“One good thing the government has proposed is to make the penalties less onerous for people who go over the cap. Previously it was far too onerous.

“You should do your own personal planning on how close you want to go to the cap.”

Below, we took the average super balance for a 35 year old — $45,000 — and did some sums on the amount extra they can expect to end up with due to the increase from 9.25 to 9.5 per cent on retiring. It calculated in average fees, charges and assumes a retirement age of 70, and a balanced investment option.

For example someone on $60,000 will benefit with an extra $8,036 when they retire.

Salary

$60,000

9.25 per: $422,489

9.5 per cent: $430,525

Difference to your hip pocket: $8,036

$80,000

9.25 per: $521,593

9.5 per cent: $532,306

Difference to your hip pocket: $10,713

$100,000

9.25 per: $615,013

9.5 per cent: $628,206

Difference: to your hip pocket: $13,193

$150,000

9.25 per: $826,860

9.5 per cent: $845,702

Difference to your hip pocket: $18,842

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Indeed, the younger workers must forego wages in their hands and have their money quarantined so they wont be able to claim the overly generous pension that the current crop of layabout retirees think is their birth right.
Sounds a tad selfish of the current retirees but don't tell them that.
their brains will explode

Quote:


well the current crop of pensioners will retire at 65 on full and generous pensions.
meanwhile , through their selfish 'grey power" whinging and protest rallies, they will make the younger workers

1  support them in the luxury to which they have become accustomed.
2  forego pay rises and have money put into super where young people cant access it.
3  work til they are 70
4  pay for their own meagre retirement out of their super.

the age of entitlement seems over for everyone except the pensioner.

You will have to ask Mr Abbott that.  Didn't he say, people would get the 12 percent super after two years?.      

Quote:



Good grief crook, it comes straight out of the pockets of the small business owner, just like your penalty rates.
keep trying to annihilate the movers and shakers and risk takers.
should devalue the country enough for our Asian neighbours to take over and then see how much super you get 

Tony wrote on Jun 23^rd, 2014 at 9:30am:


Way to generous.
pensioners , (who aren't complete drop kicks) should definitely own their own home.
this puts them at an incredible advantage over younger people. And yet, the pension is paid at a much higher rate then the dole and people on the dole would need a car etc to look for work.
pensioners just need a local aldi and a good supply of blankets. Most seem to think they are entitled to 2 $30,000 hip replacemetns and 2 $30,000 knee replacements and a yearly cruise on P and O.
what a selfish generation

Tony wrote on Jun 23^rd, 2014 at 9:30am:


......individuals can make their own contributions (shock horror  ) instead of relying on handouts and  / or living out of someone else's pocket

Tony wrote on Jun 23^rd, 2014 at 9:42am:



I  resent the resentful and the ungrateful on behalf of those who have to lift these leaners .
The pensioner is a very loud creature. this is because it is spoilt. the down trodden working poor have no voice because  they don't have the energy to protest after their long days of toil.