Pensioners exempt from imputation system reform

Tuesday 27 March 2018

The Labor party has indicated it will exempt Age Pensioners and other income support recipients from its proposal to partially reform Australia’s dividend imputation system.

On 13 March 2018, Labor announced that, if elected to government, it intends to remove the ability for individuals and superannuation funds to receive a refund of excess imputation credits from 1 July 2019, making imputation credits a non-refundable tax offset. Charities and not-for-profit organisations are proposed to be exempt from this change.

In its latest announcement, Labor has indicated recipients of Australian government pensions and allowances, such as the Age Pension, Disability Support Pension and Newstart Allowance and self managed superannuation funds (SMSFs) with at least one member receiving a pension or allowance as at 28 March 2018 will also be exempt from the reform. This means income support recipients and certain SMSFs that own Australian shares will continue to be eligible for a refund of excess imputation credits if Labor’s reforms are legislated.

Further information

Chris Bowen MP, Labor’s plan to crack down on tax loopholes, protect pensioners and pay for schools and hospitals (Media release), 27 March 2018

Chris Bowen MP, A fairer tax system: dividend imputation reform (Media release), 13 March 2018

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