The Institute of Public Accountants has called on the Government to reinstate the $35,000 concessional contributions cap for people aged 50 and over.
The IPA 2017/18 pre-Budget submission notes that one of the superannuation changes passed by the Parliament in November 2016 was a reduction in the concessional contribution cap to $25,000 for all eligible contributors.
“IPA does not support the reduction of the contribution caps to $25,000 and in particular, the reduction of the current cap of $35,000 for individuals aged over 50 years of age,” says the submission.
“People aged over 50 should be encouraged to make further superannuation contributions especially when they have the capacity to do so to address any super balance shortfall.”
“The situation is further exacerbated as the Government has also announced the deferral of the proposed catch up measure until 1 July 2018, which effectively means the first catch up will not be available until the 2019/20 financial year. The deferral was a budgetary decision to partially offset the cost of re-introducing an annual non-concessional contributions cap.”
“The current annual concessional contribution cap for over-50s which is $35,000 is less than a third of what the cap was 10 years ago. The May 2010 Henry Tax Review supported a higher contribution cap for Australians aged 50 or over.”