Protection for judges, but no tax relief

afr.com:

When it comes to judges, the government giveth – and the government taketh away.

This week, the federal parliament passed legislation introduced by Attorney-General Mark Dreyfus that will ensure “inferior” federal judges can no longer be sued by litigants.

Liable: Judge Sal Vasta. 

This follows the historic judgment against Judge Sal Vasta of the Federal Circuit Court for the wrongful imprisonment of a Brisbane man during a property dispute with his ex-wife (Vasta is on the hook for $50,000 of the $300,000 payout).

But Treasury is holding firm on plans to tax the pension for “superior” federal judges – those above the Circuit Court – by treating it like a super fund.

The legislation, if passed, would establish a new tax known as a division 296 tax liability – an additional 15 per cent tax rate on the earnings ofsuper accounts over $3 million, proportionate to how much of their balances are over that threshold.

Judges have pointed out this would mean the pension – which can be worth $7 million over 20 years – is not being treated like a retirement income.

Current judges will only be spared the tax until retirement because the Constitution does not allow the government to change the remuneration of judges in Commonwealth courts while they are on the bench. The provision does not cover judges of state courts because of a 2003 decision (Austin).

The pension for “superior” judges – members of the High Court, Federal Court and division 1 of the Federal Circuit and Family Court (the former Family Court) – is 60 per cent of the salary, indexed, for life. Federal Court judges are now paid $480,900.

They pay marginal rates of tax on that pension. The superannuation tax is paid on the after tax pension sum.

It takes crying poor to