Policy change cut Ministers’ retirement incomes

“I remember being taught that if you did something wrong, you should admit it and try to make it right again,” says Rev Neil Wilkinson. “But will politicians follow this rule?”

Neil is referring to the unfair treatment of Uniting Church Ministers whose retirement incomes were slashed by Scott Morrison as Minister for Social Services in the Abbott government in 2015.  The move was touted 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.

However, it also caught Uniting Church Ministers, many of whom had worked for meagre salaries in the days when their wives were expected to become unpaid church assistants rather than seeking paid employment. Large families were also the norm. So our Ministers were far from being ‘fat-cats’.  We seem to be the only church affected, because our super fund is a Defined Benefit Fund, rather than an Accumulation Fund.

Rev Clem Dickinson, former CEO of the Uniting Church Beneficiary Fund, has teamed up with Neil, former Chairperson of the federal Superannuation Complaints Tribunal, to approach both major parties again about this unfairness which had bipartisan support at the time. In June 2015, this ‘reform’ was rushed through Parliament as a desirable and lucrative budget measure, but with minimum informed scrutiny. Neil and Clem are self-funded retirees, unaffected by this issue. But they want justice for the many Ministers (or surviving spouses) who rely on the aged pension to supplement their modest income from the church’s superannuation fund.

The Uniting Church Beneficiary Fund had its origins as far back as 1846. The church fathers wisely decided that Ministers must contribute 6 per cent of their after-tax income to the super fund to help provide for their retirement. This was a big sacrifice for Ministers, given that their stipends were minimal, especially in earlier decades.

The Morrison-Abbott policy change cut the Centrelink pensions of our Ministers by some $2 000 to $5 000 each year. The church’s plea for special consideration fell on deaf ears. Now in the fourth year of these cuts, each Minister (or surviving spouse) has already lost in total between $6 000 to $15 000 from their rather modest income or savings. Ministers of religion spend their lives caring for others, especially the less-well-off, so have been reluctant to publicise their personal circumstances.

Labor has currently stirred the possum by proposing changes to franking-credit refunds for non-pensioner, non-tax-paying retirees. Clem and Neil don’t intend to buy into that debate. However, they have noted an emphatic recent comment from Treasurer Frydenberg: “Labor can’t manage money, so it’s coming after yours” plus 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.

For consistency’s sake, Clem and Neil ask the Coalition why it “came after” our 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.

Clem and Neil sum up the situation this way: “Churches and congregations tend to overlook their own needs, but injustice must be tackled wherever it occurs in society.  This includes trying to stand up for our own dedicated employees.”

A copy of the letter sent by Clem and Neil to Scott Morrison and Bill Shorten can be obtained by calling Clem on 0438 080 312.

Joan Wilkinson

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