In a move which will be welcomed by consumer groups and some elements of the superannuation industry, the Federal Government has used the Federal Budget to announce a ban on exit fees on superannuation accounts.

The Federal Treasurer, Scott Morrison also followed through on the recommendation of a Parliamentary Joint Committee in stating the Government would also stop superannuation funds from extracting life insurance premiums from the superannuation balances of people aged under 25.

Handing down the Budget, Morrison said that the banning of exit fees would assist those people wishing to switch superannuation funds, while the changes to insurance arrangements for younger, low-balance members would ensure that super savings were not eroded.

“We will stop superannuation funds from forcing young people under 25 or with low balances to pay for life insurance policies they have not asked for or do not need,” he said.

The Treasurer also outlined a “Pension Loans Scheme” which would be open to older Australians, including full rate pensioners and self-funded retirees which he said would enable them to boost their retirement income by up to $17,800 for a couple, without impacting on their eligibility for the pension or other benefits.

He said an expanded Pension Work Bonus will also allow pensioners to earn an extra $1,300 a year without reducing their pension payments and that, for the first time, the bonus would be extended to self-employed individuals who could now earn up to $7,800 per year.