People on low incomes don’t use TRIS, says PM

Federal Budget 2016/17, Budget 2016, TRIS, transition to retirement income stream, transition to retirement pension, PM, Prime MinisterThe Prime Minister has said that people on low incomes don’t use Transition to Retirement Income Streams (TRISs), or if they do they have received bad advice.

The PM was asked, in an interview with Neil Mitchell on 3AW, if the changes to TRISs in the 2016 Budget would impact people on low incomes.

“Can I say this to you though people on low incomes don’t use TRIS’,” answered Mr Turnbull.

Mitchell responded that he’d had callers say they were on below average incomes and using TRISs.

 

“If you have a low balance in your super account you should be putting money into super – not pulling it out. Those people that rang in that spoke to you, if that is their situation they have not been well advised because we are living for much longer than you know the actuarial tables told us we were 30 years ago. If you were on, if you’ve got a low super balance as long as you are working you should be putting money into it rather than pulling money out. So what the TRIS has been used for overwhelmingly has been by people on the top marginal rate,” said the PM.

“But you do accept it can affect lower income earners?” asked Neil Mitchell.

“Well, Neil, it could but I would say it would only be a small number of cases and people on low incomes who are pulling money out of super in a TRIS while they are still working are not being well advised because what they are doing is they are running down their super while they are still working and then what is going to support them when they retire?”

The Prime Minister has said that only the top 4% of income earners would be worse off under the changes to superannuation in the 2016 Budget. However in the Budget speech the Treasurer only said that 4% of Australians would be worse off – not the top 4% of income earners.

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