The Institute of Public Accountants (IPA) has voiced its opposition to the federal government’s new superannuation measure that will result in a reduction in the concessional contributions (CC) cap.
In its submission to Treasury on the second and third tranches of the draft superannuation reform package, the IPA said it did not support the reduction of the CC 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,” IPA chief executive Andrew Conway said today.
“In fact, people aged over 50 should be encouraged to make further super contributions, if they have the capacity, to address any super 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.”
Conway said the deferral was a budgetary decision to partly offset the cost of reintroducing an annual non-concessional contributions cap.
Further, he highlighted the current annual CC cap of $35,000 for over 50s was less than one-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,” he said.
“Reducing the cap is adverse to Australians building a self-reliant retirement.”