Exclude judges’ pensions from $3m super cap says retired judge

A retired Federal Court judge and President of the Administrative Appeals Tribunal has told a Parliamentary Committee that judges’ pensions should be excluded from the Government’s $3 million superannuation tax concession cap.

The Hon Garry Downes has written to the Senate Economics Legislation Committee arguing that he believes suggestions that judges pensions will be impacted by the legislation along with those holding superannuation balances over $3 million are misconceived.

Downes expressed concern that judges pensions had been referenced in the explanatory memorandum attaching to the legislation and said it needed to be removed.

He said it was very clear that the proposed new tax is intended to be imposed only on those whose superannuation balance income is presently wholly taxed at the concessional rate of 15% with the tax intended to increase to 30% but only for balances over $3 million.

“Neither intention can apply to judges’ pensions, on which judges currently pay ordinary tax, including tax at the highest marginal rate of 45%, except for a very modest tax offset of $10,000, which still leaves more than 95% of their pension taxed at more than 30%,” Downes’ submission said.

He said, on this basis, the Senate Committee should oppose the extension to judges’ pensions.

Downes’ submission said: “There is no way that judges’ pension incomes can be equated with, or capitalised to any equivalence with, superannuation balances with earnings taxed at 15%.

“The whole of judges’ pensions, not just amounts above notional balances over $3 million, are already taxed at over 30%.”

“The inclusion of references to judges’ pensions in the Exploratory Memorandum must be mistaken and should be withdrawn from the legislation,” he said.