The Treasurer said only 4% of Australians would be worse off under the 2016 Budget changes to super, but over 15% of SMSFs are likely to be affected.
In his Budget speech Treasurer Morrison said 96% of Australians would be unaffected, or better off, under the announced changes.
However a higher proportion of SMSFs will be affected by the changes, according to estimates by SMSF software developers BGL and Class.
BGL, makers of Simple Fund and Simple Fund 360, says the 2016 Budget may affect as many as 85,000 SMSFs, with 160,000 members – over 15% of existing SMSFs.
According to BGL the $1.6 million Transfer Balance Cap will affect “at least 15% of SMSFs”. This compares to an estimated 24% of SMSFs affected by the ALP policy of taxing at 15% pension phase income over $75,000 per individual.
Labor says its policy will affect people with balances of more than $1.5 million, assuming a 5% investment return. However BGL says, based on the average returns of SMSFs from 2010 to 2014, that the effective threshold will be $1.1 million.
Meanwhile Class, makers of SMSF Administration software Class Super, estimates 13.5% of SMSFs will need to reduce pension balances if the Transfer Balance Cap is enacted.
BGL also says the Coalition policy of a $500,000 lifetime Non-Concessional contributions tax will affect at least 10% of SMSFs, though it is “virtually impossible to accurately calculate”.
In terms of the lifetime NCC cap “Class does not have access to historical data required to determine the extent of the impact”.
“This lack of data highlights the challenges for the industry,” said Class.
“No one other than the ATO has ready access to lifetime contribution data. Anyone who has a rollover, or who has changed administrators, advisers or software providers is unlikely to have the appropriate records. The Budget papers noted that the ATO has reliable data back to the retrospective start date of 1 July 2007. The ATO will need to make this data available to the members and their advisers.”
“We are seeing a lot of anger directed at the ridiculous impractical superannuation policies from both sides of politics” said BGL Managing Director Ron Lesh.
“Many people are disillusioned with their superannuation. They feel the proposed superannuation policies of all the major parties are simply unfair to people who have worked all their lives to build retirement savings. They are bad for SMSFs, highly retrospective and in my view bad for Australia’s future.”