The SMSF Professionals’ Association of Australia (SPAA) has called on the federal government to raise the concessional contributions caps from their current levels to help ensure Australians will be able to adequately fund their own retirement.
Under the current concessional contributions caps, individuals aged under 60 are limited to contributions totalling $25,000, while those over 60 can contribute as much as $35,000. After 1 July 2014, people over the age of 50 will also be able to contribute a maximum amount of $35,000.
“The recent increase from $25,000 to $35,000 was welcome, but SPAA strongly believes the cap needs to be higher to allow superannuation savers to be able to make greater concessional contributions,” SPAA chief executive Andrea Slattery said.
“This is especially relevant to women and those with broken work patterns as a higher concessional cap will give them the chance to contribute more to superannuation at a time when they can afford it most.
“There is now an opportunity for the new coalition government to take on the challenge of increasing the cap and providing an opportunity for more Australians to establish a self-sufficient and dignified retirement for themselves.”
Slattery said SPAA had been advocating a higher concessional contributions cap for those over the age of 50 ever since the limit was reduced to $25,000 in 2009.
Furthermore, she said the tax deductibility of the contributions was absolutely critical.
“We view the tax concessions for contributions as the essential key to the policy design of the Australian superannuation system that encourages Australians to save a reasonable amount for a sustainable retirement. The concessionally taxed contributions to superannuation give people the incentive they need to forgo current spending in favour of saving for retirement,” she said.
