The Government’s proposed super changes are unfair and need to be amended, Chartered Accountants ANZ believe.
The accounting firm said the lifetime non-concessional contribution cap, the pension account balance limit, and the concessional contribution cap reduction proposals needed to be reviewed.
Chartered Accountants ANZ head of superannuation, Tony Negline, said “this isn’t only an issue for higher net worth Australians or higher income earners”.
“This is an issue for middle Australians and we implore the Government to amend its policy announcement.”
Chartered Accountants said the $500,000 lifetime non-concessional contribution cap was too low and unfairly impacted those who had been preparing to use the current rules and now found themselves disadvantaged because access would be blocked.
“A higher lifetime limit should be introduced for those aged at least 50 years of age before July 2016,” the firm said.
“The start date of this measure should not apply for contributions made since 1 July 2007. We have a number of practical difficulties with counting contributions from about nine years ago. It is heroic to assume that investors will be easily able to access accurate contributions data of their past NCCs so they don’t fall foul of this new rule.
The firm also said the $1.6 million pension account balance limited raised a large number of questions such as who would make the assessment about an investor’s pensions if they were within or exceeded the limit.
“How and when will super funds forward this information? At what transaction date will the assessment be done?” Chartered Accountants said.
“If, or how and when, death benefit pensions will be assessed under the $1.6 million limit. The movement of pensions from one product to another especially if the original pension has declined due to severe market turbulence. Will there be a reassessment?”
On the reduction on the annual concessional contribution cap to $25,000, the firm said the total concessional contributions would be limited to $250,000 over a 10 year period.
“This is clearly inadequate even allowing for the compulsory employer contributions made during a person’s working life,” it said.
“The Government needs to urgently review this policy and should consider introducing a lifetime concessional contribution cap that has appropriate and sensible transitional arrangements.”
