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Increase Contributions Cap to AU$35,000, SPAA Tells Government

Posted: 08 Feb 2012

The Self-Managed Super Fund Professionals' Association of Australia (SPAA) has called on the government to increase the concessional superannuation contributions caps for individuals older than 50 to be lifted to AU$35,000, a AU$10,000 increase over current concessional caps.

SPAA says lifting the concessional caps will provide an increased incentive for individuals to save for retirement, in line with the government’s policy objective of reducing reliance on the age pension.

SPAA communicated this message this week in its 2012 budget submission to the federal government, and SPAA CEO Andrea Slattery will press the point as a member of the Government Superannuation Roundtable, a body that will discuss suggestions to improving retirement options and increase certain concessions.

In its budget submission, SPAA also recommended that the government increase the concessional contribution cap “as soon as is fiscally possible.”

"There's a need for individuals to be able to make catch-up contributions later in life, an opportunity which is currently denied by the current low level of concessional contribution caps," Slattery says. “The administrative cost and complexity of introducing the proposed $500,000 balance threshold for those aged 50-plus, versus a standard increase in contribution caps, far outweighs the benefits for the industry and all individuals, which is contrary to the government's objectives to improve the efficiency of the superannuation system.”

In the 2009 budget, the government cut concessional superannuation contribution caps by 50% from $50,000 to $25,000 for those aged less than 50 years.

(RA)

If you have any comments about this story or news tips, contact Christopher Gohlke in New York at cgohlke@globalcustodian.com or Janet Du Chenne in London at jduchenne@globalcustodian.com.