Concessional caps not prejudicial

Self-managed super fund (SMSF) advisers have questioned suggestions that the concessional contribution settings are prejudiced against small businesses with SMSFs.

Financial services lawyer Peter Townsend recently suggested that the concessional limit, which has remained unchanged at $25,000, was prejudicing people running a small business if they used an SMSF.

Concessional settings for wage earners using a public offer fund are indexed to their salary increases, meaning that the concessional limit would now be worth $28,000.

But SMSF adviser Andrew Hewison said the limit for everyone was $25,000 and thus in practice, the limits would not be prejudiced against anyone.

"Just because you're a wage earner, it doesn't mean you can put more into super," he said.

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Small business owners should be giving themselves a 3 per cent increase each year in their salary, or making sure that they address their superannuation needs, Hewison said.

Part of running a small business is to understand super, and they were taking their own risks in not putting money into super when they were building their business, he said.

While the concessional limits are the same for the entire system, small business owners need to plan their cash flows properly when contributing to super, according to SFG Australia private client adviser Jim Kilkenny.

People who planned reasonably well could still take advantage of the concessional limits, unless they had a bad year, he said.

The main disadvantage to small business owners was the irregularity of income, he said.