Positive superannuation changes under threat
24 August 2016: Commenting on today’s announcement by the ALP of their opposition to three of the Federal Government’s superannuation budget announcements, Deloitte Tax partner Meghan Speers, says:
“As a woman championing flexibility in the super system I am disappointed we could lose this aspect of the reforms. What is most concerning is the measures that have been opposed support those who are disadvantaged, such as part-time workers and those who have interrupted work patterns, many of whom are women. They also assist older workers and people who don’t have salary sacrifice arrangements in their jobs saving for their retirement. Whilst we recognise the need for budget repair, the particular aspects of the Federal Government’s budget announcements already proposed an acceptable balance between fiscal responsibility and fairness.
“Flexibility, including an adequate life-time cap for concessional contributions, needs to be considered in any superannuation changes proposed by the Government or Opposition.”
The three measures that do not have ALP support are, broadly:
- Individuals under age 75 would be able to make top-up personal superannuation contributions up to the annual concessional contributions cap and claim these in their individual tax return
- Where an individual’s superannuation balance is less than $500,000, unused concessional contribution cap amounts would be able to be carried forward on a rolling basis for five consecutive years
- Older Australians aged between 65 and 74 would be able to make superannuation contributions and not have to meet a work test.
Speers adds: “The $500,000 lifetime cap on non-concessional contributions has caused significant anxiety in some sections of the community and the ALP announcement setting a start time of Budget night rather than backdating contributions from 2007 will be a welcome compromise. However, there continues to be issues around intergenerational fairness with this proposal and we would encourage the Government and the Opposition to continue to work on a solution.
“The ALP announcement of the lowering of the threshold for high income super contributions from $250,000 to $200,000 is a step in the right direction, more closely aligning this with the $180,000 45% income tax bracket.”