Labor signals changes to cash refunds policy with plan to 'protect pensioners'

Federal Labor is retreating from the full force of its policy to end cash refunds for some shareholders, sparing all pensioners from the crackdown.

Key points:

The Opposition has sustained two weeks of Government attacks
"We believe in a fair go for pensioners," Bill Shorten says
Every pensioner will still be able to benefit from cash refunds

Shielding 306,000 full and part-pensioners and allowance recipients will cost $700 million over four years, but Labor said its policy would still save $10.4 billion over the forward estimates.

The Opposition has sustained two weeks of Government attacks over the plan that would have stripped pensioners of the cash payments.

Labor leader Bill Shorten will today announce the carve out to "protect pensioners", effectively acknowledging his policy could have unintended consequences.

"We believe in a fair go for pensioners… that's why Labor is making sure pensioners will still be able to access cash refunds from excess dividend imputation credits," Mr Shorten said.

"Pensioners and allowance recipients will be protected from the abolition of cash refunds for excess dividend imputation credits when the policy commences in July 2019."

People who receive the Age Pension, Disability Support Pension, Carer Payment, Parenting Payment, Newstart and Sickness Allowance will be exempt.

Shadow cabinet yesterday agreed to shield full and part-pensioners from the clampdown on tax benefits for share owners.

'Every pensioner will be able to benefit from cash refunds'

The Government has criticised Labor's policy for unfairly targeting self-managed super funds and the Opposition will also announce exemptions for those people.

"Self-managed superannuation funds with at least one pensioner or allowance recipient before 28 March 2018 will also be exempt from the changes," Mr Shorten said.

"This means that every pensioner will still be able to benefit from cash refunds."

If it wins the next federal election, Labor will end cash refunds for some shareholders.

Those who have no taxable income can currently claim a cash refund for any excess franking credits they received with their dividends, which the Opposition has argued mainly benefits the wealthy.

The Government has called the plan double taxation.

Let's block ads! (Why?)