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The self-managed super fund (SMSF) Professional’s Association of Australia (SPAA) has urged industry and government to work together to remove harsh penalties for super fund investors who mistakenly make excess super contributions.
Chief executive of the SPAA Andrea Slattery said the government should redraft the Superannuation Industry Supervision (SIS) regulation to allow excess super contributions to be refunded without tax penalties. Currently, the refund option available under the SIS Act only applies in situations where the non-concessional contribution is by itself in excess of the cap.
Slattery recently called for transitional relief for SMSF trustees caught up in an inadvertent breach of the concessional contribution caps. The call came in response to an alert by the Australian Taxation Office warning SMSF members not to use trust clauses in SMSF trust deeds that attempt to restrict super contributions in excess of the current super caps.
Penalties can be as high as 93 per cent for excess super contributions.
“A long-term solution to the issue of excess super contributions tax requires a package of legislative reform and calls on the industry to join together to push for this reform,” Slattery said.
Slattery also called for concessional caps to be returned to their pre-2009 levels, allowing taxpayers to increase their retirement savings.
In a heated question and answer session at the recent SPAA conference in Melbourne, planners called on Minister for Financial Services Chris Bowen to remove the tax on excess super contributions, saying their clients were incurring large penalties.
