POWERED BY MOMENTUM MEDIA
ASFA urges Govt to expand work test exemption
The Association of Superannuation Funds of Australia (ASFA) is encouraging the Federal Government to consider expanding access to the exemption from the contributions work test to individuals with a total superannuation balance under $500,000.
In its submission to Treasury, the superannuation body said it strongly supports measures that will improve retirement outcomes for all Australians and was pleased the Government is proceeding with its Budget commitment to provide an exemption from the contributions work test for recent retirees with low superannuation balances.
“However, while we welcome the measure, ASFA is concerned that the implementation and administration of the exemption and related amendments to the contribution cap arrangements will involve unwarranted complexity for individuals and impose a significant compliance burden and cost on superannuation providers and the Australian Taxation Office (ATO),” ASFA said.
“Significantly, the proposed criteria for accessing the exemption introduce a new monetary threshold (total superannuation balance of less than $300,000 as at the previous 30 June) as well as a new restriction to the already complicated rules for accessing a ‘bring forward’ of an individual’s non-concessional contributions cap.
“This will potentially create complexity for individuals, making it difficult for them to understand what amount they can contribute to superannuation.”
ASFA said the added complexity may potentially act as a disincentive to the very group the exemption is intended to assist, that is, those with low superannuation balances, who have the greatest need to increase their retirement savings.
“We anticipate that many individuals would require financial advice to fully understand the implications of the exemption, yet the exemption is targeted at individuals with modest superannuation balances who are, in ASFA’s view, unlikely to seek advice,” the submission said.
“ASFA encourages the Government to consider expanding access to the exemption to individuals with a total superannuation balance under $500,000. As well as reducing complexity (by avoiding the introduction of an entirely new threshold into the contribution rules), this would enable a greater number of individuals to take up the opportunity to increase their superannuation savings ahead of retirement.”
Recommended for you
The pace of economic growth in Australia is expected to “grind higher over coming quarters” off the back of lower inflation, falling interest rates, and a robust labour market, Deloitte has said.
The superannuation sector has welcomed confirmation that a controversial US tax provision will be removed.
A new analysis from environmental finance group Market Forces has reportedly discovered that AustralianSuper is on the b...
Treasurer Jim Chalmers has held talks with US Treasury Secretary Scott Bessent, intensifying efforts to resolve concerns over section 899 of the proposed “Big Beautiful Bill” in the United States.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
92.15 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
53.24 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
43.15 3 y p.a(%)
4
DomaCom Shoreline North Coogee
36.26 3 y p.a(%)
5
GAM LSA Private Shares AU I
35.87 3 y p.a(%)
