Noel Whittaker
Noel Whittaker

Super changes haven't undermined its usefulness

DESPITE all the rumours about potential changes to superannuation, it remains a great tax saving tool in the right circumstances.

However, it's important to understand the importance of putting it in the name of the most appropriate partner - you cannot have a joint superannuation account.

The first issue is access because you can't withdraw your superannuation in most cases until you reach your preservation age. This is a 55 for people born before 1 July 1960, and then moves up on a progressive basis until it becomes age 60 for people born after 1 July 1964.

If one partner was considerably younger than the other it may be appropriate to favour building up the superannuation in the name of the older person as a couple could gain access earlier.

The next issue is assessment by Centrelink. As a general rule money in superannuation is not assessed by Centrelink until the holder reaches pensionable age. This is currently 65 for men and 64.5 for women born between 1 July 1947 and 31 December 1948 and 65 for women born between 1 January 1949 and 30 June 1952.

Pensionable age is 67 for anybody born after 1 January 1957.

If a person had a much younger partner and getting a part age pension was more important than gaining access to the money it may be best to hold the money in the younger person's name where it would not be assessed by Centrelink until they reached pensionable age.

The rules are a little complex, and it can be costly if you get it wrong. This is why good advice is essential.

Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. Email: