Following hints from Treasurer Joe Hockey that the preservation age may increase before the next election, one lawyer has said the preservation age should be “abolished” altogether.
SMSF Adviser conducted a straw poll following this suggestion from the Treasurer, asking practitioners if they believe the preservation age should be increased in line with the changes to the age pension.
Of the 147 respondents, 64.6 per cent voted ‘no,’ while the remainder voted ‘yes.’
Speaking to SMSF Adviser, Dwyer Lawyers principal Dr Terry Dwyer said increasing the preservation age would disadvantage heavy manual labour workers and would push people into looking for other saving alternatives outside super.
“If you don’t give people the flexibility and if you keep on trying to push out the preservation age, you undermine confidence in saving overall.”
He would like to see the preservation age abolished altogether, allowing Australians to access their super whenever needed.
“The preservation age concept is fundamentally wrong,” he said.
Also speaking to SMSF Adviser, the SMSF Professionals’ Association of Australia’s director, technical and professional standards, Graeme Colley said any proposal to raise the preservation age should involve “careful and measured debate.”
“Also, any examination should include the impact of an increased preservation age placing demands on other parts of the social security and welfare systems, particularly, between the cessation of work and the commencement of an entitlement at preservation age,” Mr Colley said.
“In some cases people may need to access New Start and disability benefits in the interim if they are unable to obtain paid work.”
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