Govt still wrong on concessional caps
One of Australia's key superannuation bodies has endorsed the Government's Budget arrangements for the one-off refund of excess concessional contributions up to $10,000, but lambasted the underlying policy giving rise to the contribution cap breaches.
The Association of Superannuation Funds Australia (ASFA) has used a submission to the Treasury to make clear it believes the current concession contribution caps are too low and not appropriately targeted.
It said the targeting of the concessional caps was awry because they had a significant impact on individuals who did not have sufficient superannuation savings, but who were attempting to catch up at a time of their life when they could afford to make substantial contributions.
"This can be particularly the case for women who have re-entered the full-time workforce after a break from paid work (or having worked part-time), as well as those individuals who have paid off their mortgage and are now in a position to contribute more to their superannuation savings," the submission said.
It said many fund members were encountering significant difficulties in complying with the current contribution limits.
"These difficulties, which have led to a significant number of inadvertent breaches, appear to arise from a combination of a desire to maximise contributions, the impact of third party contributions, difficulty in planning contributions over a 12-month period, and a lack of understanding/appreciation of the operation of the law by both individuals and their advisers," the submission said.
ASFA said it was continuing to advocate for the reinstatement of the original concessional contribution caps because it believes the current large number of breaches is directly attributable to the halving of the concessional caps in 2009.
AUTHOR
Mike Taylor
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