Contributions cap amendment doesn't go far enough, says SPAA
The Self-Managed Super Fund Professionals' Association (SPAA) has come out strongly against the Government's changes to the concessional contributions regime, saying it "falls short of a workable solution".
The Tax and Superannuation Laws Amendment Bill, introduced to Parliament last week, would allow people who breach their excess contribution cap by up to $10,000 to have the funds refunded from their superannuation and assessed at their marginal tax rate.
But SPAA chief executive Andrea Slattery is concerned that the arbitrary $10,000 figure would mean that a person who exceeded the cap by $10,001 would not be eligible for a refund.
"Linking eligibility for the refund to a dollar threshold will deny many taxpayers the option of a refund, even though their circumstances are broadly the same as other taxpayers who are eligible for the refund," Slattery said.
By limiting the eligibility for the refund to the first breach of the concessional cap, people who breach the cap in future years will not have the option to choose which year the refund will apply in, she added.
Slattery was also critical of the decision in the amendment to freeze the indexation of the concessional contributions cap for one year.
"Suspending indexation of the annual concessional superannuation caps will hinder individuals' ability to voluntarily save adequately for retirement, and potentially worsen the excess contributions tax problem.
"This, in turn, may even reduce consumers' confidence in superannuation as a savings vehicle," Slattery said.
The SPAA's position is that superannuation contribution caps should be restored to pre-2009 levels, she said.
Recommended for you
Data and technology provider Novigi has acquired Iress’ superannuation consulting and managed services business from Apex Group.
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
