Planner suggests superannuation law overhaul

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Certified financial planner Paul Levy has made a suggestion to the FPA and the AFA about an amendment to the superannuation law, which he says could have benefits to clients as well as the economy.

His idea is to allow people with superannuation to move their super into new bank accounts called Superannuation Offset Accounts (SOA). These accounts will still fall under all the usual SIS Act regulations and restrictions but the amount injected can be offset against the member’s mortgage.

This is vital at a time when many Australians are struggling financially as a result of the GFC, the carbon tax, mining tax, increased unemployment and increases in electricity, petrol and gas, said Levy.

Results he hoped would come out of the change included improved cash flow due to reduced interest payments and more money each week to spend on goods and services, taking the pressure off the economy.

The idea also benefits banks, said Levy, as they will have access to more money at a cheaper price that they can then on-lend to new loans.

“Some of the loans offset would be investment use loans which would result in less tax deductions and therefor higher taxes paid to the ATO,” he said.

FPA general manager of policy and standards Dante De Gori said Levy’s proposal would support consumer confidence and a sense of immediate benefit from their superannuation.

“For this reason the FPA will consider your proposal, without respective policy and technical committees, as we continue our discussions with the Government…” said De Gori.

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