Government backflips on major elements of the proposed superannuation tax reforms

The announcement today by the Government on the tempering of superannuation changes has delivered mixed news for Australian taxpayers.

Tax & Super Australia CEO Moti Kshirsagar says he fully supports the abandonment of the proposed $500,000 retrospective cap, as well as the corralling of $1.6 million worth of funds in pension phase.

“The complete removal of the $500,000 lifetime non-concessional cap will allow members of superannuation funds to recover their superannuation balances in the event of adverse market movements through making additional non-concessional contributions,” Kshirsagar says.

The superannuation account limit of $1.6 million imposed on the ability to make non-concessional contributions is a necessary step towards making superannuation system more sustainable.

However other changes, that abandon simplifying the acceptance of contributions, will have a negative impact on taxpayers over the age of 65. “The previous proposal was a genuine attempt to simplifying and streamlining the rules, as well as allowing greater flexibility to taxpayers over the age of 65,” Kshirsagar says.

Source: Tax & Super Australia

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