The superannuation concessional contribution cap for individuals over 50 should be restored to $35,000 as the Government should encourage people to make further super contributions, according to the Institute of Public Accountants (IPA).
In November, 2016, the Government passed super reforms, which included a reduction of the concessional contribution cap to $25,000 per annum for eligible contributors, a stance that the IPA did not support.
IPA’s chief executive, Andrew Conway, said: “People aged over 50 should be encouraged to make further superannuation contributions especially when they have the capacity to do so to address any superannuation balance shortfall”.
“In particular, we do not support the reduction of the current cap of $35,000 for individuals over 50 years of age.”
He also said that a budgetary decision to defer the proposed catch up measure until 1 July, 2018 which effectively meant that the first catch-up would not be available until the 2019/20 financial year, was aimed to help offset the cost of reintroducing an annual non-concessional contributions cap.
IPA reminded that the Henry Tax Review had recommended a higher contribution cap for Australians aged 50 and over and yet the current cap of $35,000 was less than a third of what the cap was 10 years ago.
