The Institute of Public Accountants (IPA) has called for the restoration of the superannuation concessional contribution (CC) cap for those over 50 to $35,000 and reminded the federal government the Henry tax review recommended a higher cap.
“With the government’s superannuation reforms passed in Parliament in November last year, the CC cap was reduced to $25,000 per annum for all eligible contributors – a position that the IPA does not support,” IPA chief executive Andrew Conway said today.
“In particular, we do not support the reduction of the current cap of $35,000 for individuals over 50 years of age.
“People aged over 50 should be encouraged to make further super contributions, especially when they have the capacity to do so to address any superannuation balance shortfall.”
Conway added the situation was further exacerbated by the government’s announcement of the deferral of the proposed catch-up measure until 1 July 2018, which effectively meant the first catch-up would not be available until the 2020 financial year.
“The deferral was a budgetary decision to partially offset the cost of reintroducing an annual non-CC cap,” he said.
“The Henry tax review also recommended a higher contribution cap for Australians aged 50 and over, and yet the current cap of $35,000 is less than a third of what the cap was 10 years ago.
“We need to encourage contributions to superannuation in line with the original intent of super and that is self-funded retirement.”