More concerns around excess contributions
The Institute of Chartered Accountants in Australia has raised serious questions about the Government's approach to excess superannuation contributions and the role of the Commissioner for Taxation.
The questions have been raised by the ICAA's superannuation specialist, Liz Westover, who said she was disturbed by the refund process applying to the $10,000 available with respect to excess contributions, under which the Commissioner will deduct from the refund any tax that the individual might owe following the contribution being reassessed as income to the individual.
She said that while this might seem fair enough, a catch existed.
"The Commissioner can also deduct any other tax liabilities owing to the tax office, and also any other payments owing by the individual to other government agencies," Westover said.
She said that while current tax laws may permit the Commissioner to do this as the refund is made by virtue of a tax law, "it doesn't seem quite fair for the Government to have 'first dibs' on any refunded amounts".
"This approach is inconsistent with the provision of relief," Westover said.
She said it had to be remembered that the majority of excess contributions were mistakes.
"The provision of some relief should not include a debt collection medium for the Government," Westover said.
Recommended for you
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.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
