Government delays concessional contributions regime
The Government has deferred the start date of the higher concessional contributions cap by two years from the originally intended start date of July 1, to July 1, 2014.
The deferral was confirmed in the Federal Budget with the Minister for Financial Services, Bill Shorten, later claiming it reflected industry concerns about cost and complexity.
“In consultations on the implementation of the higher cap, the superannuation industry raised concerns in relation to the cost and complexity involved in administering the balance limit, and the difficulty some individuals may face in determining whether they are eligible for the higher cap,” the minister said.
Shorten claimed deferring the start date would also “bring significant synergies and efficiencies as it will allow implementation to occur in conjunction with changes to superannuation fund reporting and systems that will be occurring under the SuperStream reforms”.
Under the higher concessional contributions cap measure, individuals aged 50 and over with superannuation balances below $500,000 would be able to make up to $25,000 more in concessional contributions than allowed under the general concessional contributions cap.
The two-year deferral means that for 2012-13 and 2013-14, all individuals would be able to make concessional contributions of up to $25,000 per year as permitted under the general concessional contributions cap.
In 2014-15, the general cap is likely to increase to $30,000 through indexation, and the higher cap would then commence at $55,000.
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