In its submission to Treasury on the second and third tranches of the superannuation reform package, the Institute of Public Accountants (IPA) has urged the Government not to reduce the cap on concessional superannuation contributions.
“The IPA does not support the reduction of the contributions cap to $25,000 and more so, we do not agree to the reduction of the current cap of $35,000 for individuals aged over 50 years of age,” said IPA chief executive officer, Andrew Conway.
“In fact, people aged over 50 should be encouraged to make further superannuation contributions if they have the capacity, to address any superannuation balance shortfall.
“The situation has been further exacerbated by the Government’s announcement to defer the proposed ‘catch up’ measure until 1 July 2018. This effectively means the first ‘catch up’ will not take place 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 contributions cap of $35,000 for over-50s is less than a third of what the cap was 10 years ago.
“The 2010 Henry Tax Review supported a higher contributions cap for Australians aged 50 and over and we support that position.
“Reducing the cap is adverse to Australians building a self-reliant retirement,” said Mr Conway.
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