SISFA has made a pre-Budget submission to Government calling for the complete removal of the $500,000 threshold test
Small Independent Superannuation Funds Association (SISFA) understands the cost to administer the current proposal is a serious concern for Government. SISFA’s long standing view is that the best and most efficient way to tackle the proliferation of excess contribution tax mistakes and the associated administrative complexities is to restore the concessional contributions cap back to $50,000 for those persons aged 50 or more, similar to the 2008 position before the caps were subsequently halved by the Government.
Greater imagination and flexibility required
Whilst SISFA does not advocate an “open slather” or “no limits” approach we hold a strong view that greater flexibility and imagination in accumulating wealth in superannuation should be encouraged and embodied in legislation.
SISFA proposes that the contributions capping system be more dynamic and flexible. Some simple solutions to this effect include:
Restoring the $50,000 concessional cap for those persons aged 50 or more;
- A “rolling period cap” or a “bring forward rule” similar to that used for non-concessional contributions so that concessional contributions in any given year which are less than the cap limit can be “caught up” in a later year(s).
- A “life time concessional cap” to allow the retirement savings of people to increase through higher contributions at times when cash flow permits. That is, moving to a “single universal limit” for life-time contributions to super, irrespective of age. This is consistent with the theme of a later acceleration model for the making of higher contributions later in life.
- Removing superannuation guarantee contributions from the concessional contributions cap rules for the purpose of determining excess contribution amounts. This would then more fairly relate the issue of excess concessional contributions to the making of non-mandatory contributions.
The full submission is attached……..
Darren Kingdon
SISFA Director
(07) 3211-1132
0411 432 882
dkingdon@planwealth.com.au
Who is Small Independent Superannuation Funds Association (SISFA)?
SISFA is an association that has represented the interests of the self-managed superannuation fund (SMSF) sector for over a decade and is currently the only SMSF industry body solely representing all participants in the sector including administrators, accountants, auditors, lawyers, actuaries and advisers.