A number of industry associations have banded together to urge the Government to adopt a concessional contributions cap for members over 50 of $35,000, regardless of their account balance, with an undertaking to increase the cap to $50,000.
The Association of Superannuation Funds of Australia (ASFA), the Financial Services Council, the Self-Managed Super Fund Professionals’ Association of Australia and the Association of Financial Advisers have all joined forces to support a new position on concessional contributions caps in a supplementary submission to Treasury.
Currently, members aged 50 and over can make concessional super contributions of up to $50,000 a year, until 30 June 2012.
The Government was proposing to extend this measure for individuals aged 50 and over with account balances below $500,000, which had previously been supported by many industry associations.
ASFA chief executive Pauline Vamos said one of the reasons for the change in position was that there had been so many other changes to the system that the implementation of a $500,000 threshold was going to be too hard at this time in terms of administrative burden.
“So we thought $35,000 was a good holding point and it still helps a lot of low-income earners,” Vamos said.
The submission further states that should the Government adopt this measure, it should undertake to increase the cap for individuals over 50 to $50,000 at the first possible opportunity, possibly in incremental amounts.
The submission stated the cost of increasing the caps for all people over 50 would be partially offset by the cost savings associated with not implementing a balance limit.
But the further cost of increasing the caps would be subject to the Government’s fiscal position at the time.
While Vamos said the new position would disadvantage some people with lower account balances in the first instances, getting the policy through was a priority.
