Women treated fairly by taxman at last

Published Jun 5, 1996

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It's a strange old world. After years of being unfairly treated by the taxman, married women now find themselves on the receiving end of the taxman's generosity.

For the past few years the taxman has been wading through the Income Tax Act and throwing out the discriminatory provisions to ensure that married women (and single taxpayers for that matter) no longer bear the brunt of the tax burden.

It's been a long process - stretched even further because the government couldn't financially afford to lose the extra tax money paid in by married women.

Recently, the taxman ended his anti-discriminatory run with a small bouquet to lady taxpayers.

The gift is two-fold, and affects women who are near retirement age.

The first part applies to retirement funds - pension and provident funds.

In the past, a male member could retire (for tax purposes) from one of these funds at the age of 55, whereas a women was allowed to retire five years earlier at the age of 50. In 1995, this discriminatory legislation was updated and the retirement age for both sexes was settled at 55.

But in the taxman's recent announcement, the updated legislation has been put on hold until March 1 2000 - four tax years away. So until that date a woman retains the option to retire from her retirement fund at the age of 50, five years earlier than a man.

Quite apart from the taxman's generosity, it's not a good idea for a woman to retire earlier than she needs to.

For one, women live longer than men - six years on average - hence they need to accumulate an even bigger retirement nest egg than men to provide them with an adequate income for a longer period.

Secondly, a woman often takes career breaks to raise her children - this lowers her retirement nest egg as she loses (financially) during the years which she does not work.

Thirdly, women generally earn less than men, which once again negatively affects the size of their retirement nest-egg.

To that awful expression, "you can never be too rich or too thin" I'd like to add, "nor have too big a retirement nest egg".

But back to the taxman's posy to women taxpayers.

The second part relates to the lump sum you receive from your employer when you retire (as a retirement gift).

Under section 10(1)(x) of the Act, the first R30 000 of this lump sum is tax-free, provided you receive this amount at retirement (or within five years of your retirement), and a male taxpayer is aged 55 and over and a women taxpayer is 50 years and older.

* A gripe about life insurance salespeople. Liberty Life agents really seem to be going all out on the cold call market.

In recent months I've had three agents get their (women) secretary's to phone me saying that the agent, Mr X, would like to meet me to discuss a product he knows I'll be interested in.

It's patently clear the secretary is working her way through an acquired mailing list which happens to have my name and number on it.

Firstly, I find it rude that the agent gets his secretary to phone me.

Is he too busy to make the call himself or don't potential customers warrant the personal touch, or am I supposed to know nothing about insurance anyway?

Secondly, the secretary is clueless about the product she wants me to know about.

And the limit of it all is a story I heard from an executive director of fellow life assurance company Momentum Life, who says he even received a call from a Liberty Life salesman (made by the secretary, of course), asking to see him about his life assurance.

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