Superannuitants’ tax

Press, 3 September 1982, Page 12

Superannuitants’ tax

Sir,-Mr Falloon, the Minister of Inland Revenue stated ("The Press.” April 21) that an earner on $5500 under the new tax scales from October 1 would pay the same tax as at present, which is $797.50. Under the new tax scales, however, a National superannuitant on $5500 will pay $1100—5302.50 more. He also stated ’ that a person earning $BOOO would pay $1491. However, a National Superannuitant receiving $BOOO will, under the new tax scales, pav $l2OO on the first $6OOO. and $620 on the remaining $2OOO. a total of $lB2O. This is because supcrannuitants are not eligible . for the $312 or principal earner rebate, according to Mr Falloon’s statement. Would Mr Falloon please confirm these figures or state exactly the tax a' National superannuitant will pay on these amounts. I specifically ask about taxation, not to be confused with Mr Muldoon’s recent statement that superannuitants will receive increases on account of increases' in the net average wage.Yours, etc.,

T. E. WEST. August 22. 1982. [ The Minister in charge of the Inland Revenue Department. Mr J. H. Falloon, replies: “In reply to your correspondent, T. E. West, I reiterate that no person receiving national superannuation will be worse off under the new tax regime. The increase in the net rate of national superannuation from September 21 has been calculated to give recipients the full benefit of both the increase in the average wage and the effects of the new tax scale, (including the principal income earner rebate) on that average wage. If the new rates of national superannuation had been calculated using the net average wage (with the old tax scale applying) a single superannuitant would have received a net weekly payment of $93.25 (an increase of $5.63 over the current rates). The effects of the new rate scale and' principal income earner rebate on the net average wage, increase that net payment of national superannuation by a further $1.90 per week. Accordingly, any superannuitant whose only im come is from national superannuation will benefit by a rise in their new super payment due to the combined effects of both the new rate scale and the rise, in the average wage. Although. it is true that some married superannuitants with a small amount of "other” income will pay more tax on that income, they will be better off when the benefits of the new scale (conveyed through the increase in net national superannuation) are taken into account."]