The changes to superannuation announced in the 2016 federal budget, namely the $1.6 million transfer balance cap and the $500,000 non-concessional contributions lifetime cap, will have an impact on more than 4 per cent of the population and will effectively take away the retirement savings aspirations of many Australians.
“For them [the government] to say it only affects the top 4 per cent of people, it must be a bloody big 4 per cent,” HLB Mann Judd wealth management partner Michael Hutton said at an industry roundtable discussion last week.
“I think it does impact on a lot of people now. It certainly will in 13 or 14 months’ time.
“I think it also impacts on a lot of people who aspire to be in that sort of position in five or 10 years’ time with their long-term planning.
“So I think a lot of long-term planning has been upset.”
Hutton was adamant there was a degree of retrospectivity to the changes considering 1 July 2007 was the nominated date from which superannuants had to determine the extent of non-concessional contributions they had made to their super fund.
He said he believed that had been a poor result so far for SMSF trustees and advisers to date.
“For example, the day after the budget we had a client come in and I couldn’t say to that client whether she could contribute $180,000 to super, $540,000 to super, or zero to super,” he explained.
“I felt it was a pretty poor position for me to be in as her adviser, but also for her to be in as someone that’s trying to save for her retirement.”
Having fielded a significant number of inquiries since budget night, he said his firm’s clients were initially disconcerted by the announcement, but felt better about the changes once the direct implications for them had been explained.