Divorce likely to be an exemption from lifetime non-concessional cap

Budget 2016, $500,000 lifetime non-concessional contributions cap, Treasurer Scott Morrison, ParliamentTreasurer Scott Morrison has indicated that divorce is likely to be a ‘life event’ eligible for an exemption from the $500,000 lifetime non-concessional contribution cap, while rejecting reports that lottery winnings and inheritances would receive the same treatment.

“We said before the election, well before the election actually that one of those events was a settlement that might have come from compensation claim or something of that nature. Other issues in relation to family court matters and things like that, the details of that are being worked through,” said the Treasurer in an interview on Sky News.

Asked to clarify, Morrison said that a divorce settlement is what he was referring to as a ‘family court matter’.

However he rejected the suggestion that lottery winnings and inheritances would also be exempted from the lifetime non-concessional cap.

“Lotteries and inheritances and things like that are speculation that I haven’t confirmed,” said Mr Morrison.

The AFR had previously reported that lottery winnings would be one of the ‘life events’ eligible for exemption from the cap.

“In relation to inheritances and lottery wins no, they are not things being contemplated by the Government nor have they been.”

Recently the SMSFOA called the idea of exempting lottery winnings “farcical”. The Treasurer had previously written a letter to the organisation setting out some of the ‘transitional arrangement’ exemptions from the $500,000 cap.

The Treasurer also said in the interview that the draft legislation would not be released in the first couple of weeks of the new Parliament, which begins to sit on the 30th of August.

“We are getting very close to that [the draft legislation] and we are making a lot of progress on that and I have obviously been consulting with my colleagues and people in the industry as well after the election as we work through the implementation issues and I think we are making very good progress,” said Mr Morrison

The AFR is reporting that the cap may be raised to $750,000 in an effort to placate some of the Coalition backbench. Coalition MP George Christensen appears to support increasing the lifetime cap to $1 million.

Update: Treasurer Scott Morrison has rejected the idea of increasing the lifetime non-concessional contributions cap to $1 million.

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One Reply to “Divorce likely to be an exemption from lifetime non-concessional cap”

  1. “… we are making a lot of progress on that and I have obviously been consulting with my colleagues and people in the industry as well after the election ..” Morrison.

    “Yes I have now had time to carefully weigh up and consider all your submissions … And, LOL, I reject them!!!”

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