Contributions to SMSFs lowest since 2007, likely due to cap changes

Contributions to SMSFs in the September 2016 quarter were the lowest since 2007, according to the latest SuperConcepts SMSF Investment Patterns Survey.

“The average level of contributions for the quarter was at its lowest level since commencement of the survey in 2007 and continued the trend we saw in the June 2016 quarter. This was clearly influenced by the budget announcement of a lifetime non-concessional contributions cap of $500,000 which was to apply from 1 July 2007,” said SuperConcepts.

According to the survey the average contribution inflow per fund for the September 2016 quarter decreased from $10,750 to $3,040.

“This is the lowest since the inception of the survey in 2007. This shows the significant impact the proposed budget changes have had on member contributions.”

Over the past three years average contributions have tended to be lowest in the March quarter and highest in the June quarter. However the June 2016 quarter was down considerable compared to June 2015.

“The continued decline in SMSF contributions this quarter is likely to be due to speculation at the time on proposed superannuation changes,” said Phil La Greca, SuperConcepts Executive Manager for Technical & Strategic Solutions.

“Following the government’s September announcement around significant adjustments to proposed superannuation changes, we expect this trend to be reversed and contribution levels to start rising  again,” he said.

“With the current $180,000 after-tax contribution cap,  and the three year $540,000 bring-forward rule remaining until 30 June 2017, we’re likely to see a significant uplift in the level of after tax  contributions before the end of the financial year.”

The quarterly SuperConcepts SMSF Investment Patterns  Survey is based on a sample of approximately 2,900 SMSFs administered by MultiPort, which is part of the SuperConcepts group.

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1 Comment

  1. Remember that lenders are fully aware of how much you can deposit as concessional and non-concessional contributions, but the limit can change from one year to the next. If the only way to prove that the SMSF can repay the loan is by making contributions over the imposed limits, then the loan will not be approved.

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