Labor slammed the decision to freeze super, saying it will hurt millions of workers when they move into retirement. But economic modelling for Fairfax Media by Marcia Keegan of SGS Economics and Planning shows the axing of the $500 low-income super rebate will have a much bigger effect on retirement incomes than the seven-year pause in compulsory super contributions. As a result of the government's changes, a person who works from age 22 to 69 on $35,000 per year will retire with 16.7 per cent less than they otherwise would have, the analysis shows. Only 3.9 per cent of the loss flows from the freeze in contribution rates. The remaining 12.8 per cent comes from the removal of the low-income super contribution.

"Because the removal of the contribution will affect low-income earners over their entire working life from 2017 rather than a small fraction of it, this results in a much bigger hit to their retirement savings," Dr Keegan said. A worker on average weekly earnings who has recently entered the workforce will retire with about 4 to 5 per cent less as a result of the changes. The loss is small because the super contributions freeze only affects super contributions for a decade of their working life. An older worker who is currently 50 years old and has $20,000 in superannuation will take a bigger hit, losing 6.7 per cent of their retirement incomes if they work to 66 and 8.6 per cent if they work to 61. Dr Keegan points out, however, that these people are able to top up their super and will receive tax concessions to help them. "Since the pause in the super guarantee allows for faster growth in wages, they have more capacity to do so," she said.

"Most employers are able to pass on the cost of super guarantee increases to workers. This means that increases in the super guarantee are funded by lower growth in wages paid directly to employees." On Wednesday, Treasurer Joe Hockey poured scorn on claims by the Financial Services Council - the super industry's biggest lobby group - that workers will lose $128 billion in savings over the next decade from the changes. Loading "The suggestion that people are losing ... $128 billion, I completely reject, because they're getting it in their pockets," Mr Hockey said. Follow us on Twitter