Policy change cut Ministers’ retirement incomes
Uniting Church Ministers faced having their retirement incomes slashed during the Abbott Liberal government. The move was touted at the time as reining in “public service fat-cats” who enjoyed generous superannuation as well as some aged pension. The policy change affected the way in which “defined benefit” superannuation pensions were assessed for Centrelink purposes.
The move also affected Uniting Church ministers. It appears that the Uniting Church is the only church affected, due to its super fund is a Defined Benefit Fund rather than an Accumulation Fund.
Rev. Clem Dickinson, is the former CEO of the Uniting Church Beneficiary Fund. Neil Wilkinson, is the former Chairperson of the federal Superannuation Complaints Tribunal. Together, they are attempting to approach both major parties again about this policy, which had bipartisan support at the time. In June 2015, this “reform” passed through Parliament as a budget measure, but Rev. Dickinson and Mr Wilkinson argue that this was with minimum informed scrutiny.
Rev. Dickinson and Mr Wilkinson are both self-funded retirees, unaffected by the issue. They told Insights that they are concerned for Ministers (or surviving spouses) who rely on the aged pension to supplement their income from the church’s superannuation fund.
The Uniting Church Beneficiary Fund had its origins as far back as 1846. Prior churches decided that Ministers should contribute six per cent of their after-tax income to a super fund to provide for their retirement.
The policy change cut the Centrelink pensions of Uniting Church Ministers by some $2,000 to $5,000 each year. While the church requested special consideration, according to Rev. Dickinson, this “fell on deaf ears”.
Rev. Dickinson and Mr Wilkinson estimate that after the cuts took effect, each Minister (or surviving spouse) has already lost in total between $6,000 and $15,000.
Comparison with franking credits debate
With a federal election looming in May, much of the current agenda has focused on proposed changes to franking-credit refunds for non-pensioner, non-tax-paying retirees.
While Rev. Dickinson and Mr Wilkinson said that they don’t intend to buy into that debate, they have argued that the government has been inconsistent in their policy rhetoric when it comes to retirees’ savings. Rev. Dickinson noted an emphatic recent comment from Treasurer Frydenberg: “Labor can’t manage money, so it’s coming after yours” and a claim that the average individual (with share portfolio) would lose $2,200 from Labor’s franking credits policy – assuming the individual was a non-pensioner, non-taxpayer.
Rev. Dickison and Mr Wilkinson argue that the Coalition has “came after” Ministers’ and widows’ money, four years ago, resulting in annual losses of $2,000 to $5,000 from these aged pensioners who generally don’t have additional assets such as a share portfolio.
Jonathan Foye is Insights’ Editor