Govt disappoints on work test reversal
The abolition of the contribution work test for those aged 65 to 75 should not have been traded off as part of the Government's decision to drop the $500,000 concessional contributions cap, according to key elements of the financial services industry.
Superannuation, planning, and accounting groups have expressed disappointment at the Government's reversal on the work test, with Institute of Public Accountants (IPA) chief executive, Andrew Conway, pointing to it as having detracted from the value of the changes announced by Federal Treasurer, Scott Morrison, on Thursday.
"We are disappointed that the drop in the non-concessional cap has been traded off for other simplification measures that were proposed such as the abolishment of the contributions work test for those aged 65 to 75," he said.
"Removing the complexities associated with applying the work test for individuals aged 65 to 75 would have simplified and improved the flexibility of the superannuation system."
West Australian planner and vocal critic of the Government's original superannuation policy, Steve Blizard, said it was disappointing that the Coalition Government had broken its election promise to get rid of the so called "work" test, thereby harmonising the super contribution rules from age 65 to 74.
"Tragically the work test imposed on 65 to 74 year olds [will] continue to hit low income recipients and divorcees, trying to save a little bit more before full retirement," he said. "The work test is of little concern for the wealthy businessperson contributing up to $100,000 per annum into super, who can fit in ample fishing and golf while semi-retired."
The Australian Institute of Superannuation Trustees (AIST) chief executive, Tom Garcia also expressed disappointment at the reversal on the 65-to 75 work test but suggested the Government had struck a balance.
"While AIST is disappointed to see the reversal of rules affecting older workers aged 65 to 74, on balance these changes are in keeping with the need to improve the fairness and sustainability of the system," he said.
"Furthermore these changes are considerably easier for funds to implement and do not add to the complexity of the system."
The Financial Planning Association (FPA) also noted the reversal on the work test as a manner of ongoing concern.
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