One Nation in Australia proposes directing part of pension contributions to current income
Australia's One Nation party has proposed allowing people who pay rent or a mortgage to temporarily direct part of their mandatory pension contributions toward increasing their current income. According to ABC News, this mechanism could be used voluntarily for no more than three years.
How the mechanism will work
Under the proposal, employers would continue paying the full mandatory 12% contribution into the superannuation system — Australia's retirement savings scheme. However, people who choose this option would be able to receive 3% of the contribution directly from the pension fund.
These payments are proposed to be taxed at the concessional rate of 15%, rather than at the higher personal income tax rate. At least 9% of the contribution would continue to go toward retirement savings.
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The party leader's position
One Nation leader Pauline Hanson said the initiative is intended to give Australians “some breathing room” amid cost-of-living pressures. According to her, the additional funds could help pay for rent or a mortgage, groceries, electricity bills and the costs of supporting a family.
Hanson stressed that the proposal would not apply to retirement funds already accumulated and would cover only future contributions. The option to receive part of the contribution as additional income would be limited to a three-year period.
