Govt moves on excess contributions
The Federal Government has, as expected, used the Budget to clean up the unintended consequences flowing from its 2008 Stronger Super initiative, which saw some people hit by large excess superannuation contribution tax bills.
The clean-up was confirmed by the Assistant Treasurer and Minister for Financial Services, Bill Shorten, who announced that from 1 July some people would be able to request refunds of excess contributions of up to $10,000.
“Individuals who breach the concessional contributions cap by up to $10,000 can request that these excess contributions be refunded to them,” he said.
However, Shorten said the new refund option would only apply for first-time breaches of the concessional caps.
“These changes will make the superannuation system fairer by giving individuals the option to take excess concessional contributions out of their superannuation fund and have it assessed at their marginal rate of tax, rather than incurring a potentially higher rate of excess contributions tax,” the minister’s announcement said.
Shorten said the change was expected to reduce the number of occasions where the concessional contribution caps were exceeded, resulting in a tax assessment.
AUTHOR
Mike Taylor
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