New super tax changes will hurt the injured
8th Apr 2013
“The catastrophically injured and their carers are having their futures thrown into doubt after the federal government announced changes to superannuation laws on Friday that are likely to mean that their compensation payments will run out early,” the Australian Lawyers Alliance said today
ALA National President, Tony Kerin, said the ALA was concerned that the new laws, designed to tax Australia’s most wealthy in order to help pay for incoming National Disability Insurance Scheme and Gonski education reforms, would ironically tax some of Australia’s most disabled people.
“This is a matter of robbing Peter to pay Paul and it makes absolutely no sense,” Australian Lawyers Alliance National President, Anthony Kerin, said.
“From 1 July 2014, earnings above $100,000 pa on superannuation assets supporting income streams will be taxed at 15%. This will include catastrophically injured people, whose injuries mean that they will never work again, and who will now have to pay tax on their invested compensation money,” Mr Kerin said.
“The very seriously disabled, such as children with birth injuries and people with brain injuries, almost always hold their compensation money in allocated pensions. Every dollar is needed to meet their future care and other costs.
"This new tax will mean they will likely have to go without some of their care and support or that their money will run out before their life expectancy,” he said.
Mr Kerin said it was enough that these people had to deal with life-changing serious permanent injuries without adding to their financial burdens.
“Given the government is introducing new taxes to help fund the NDIS, taxing the most disabled and vulnerable in our society, who are trying to support their own care needs using their compensation payment, is not helpful. It certainly will not make their lives ‘fairer and more sustainable’ as the government has suggested the measures will do.
"The ALA calls on the government to review the impact that its new laws will place on those with serious injuries and take measures to exempt these people’s compensation payments from this new tax if it is to proceed,” Mr Kerin said.