DBA Lawyers special counsel Rebecca James said small business owners still have an opportunity to get a considerable amount of money into their super, which isn’t available to standard employees.
“There may be some pressure to reduce the cap by, say, $500,000 – the non-concessional contribution cap – or get rid of it altogether,” said Ms James.
Ms James said while she would consider this a backward step by the government, this may be the next area it will look at, given the recent tightening with super.
“I was very surprised by the recent changes to super. I was surprised by the $500K cap and I was surprised by the $1.6 million transfer cap. I absolutely didn’t see that happening, so I think it’s quite an uncertain environment at the moment,” she said.
“The lesson that we’ve seen is that if there’s a concession and you can use it, use it now.”
Ms James said she expects there will be a push-back with any proposed change, especially as the government’s budget encouraged small business.
“We see a lot of small business owners that pump money into their business rather than super, in case they don’t draw a salary – and there’s certainly not a large salary in the first couple of years,” she said.
“It may be difficult for these small business owners to actually save for retirement if we don’t allow them a lump sum amount when they sell the business and its assets.”
“It is just something to flag: if you’ve got clients who can use it, use it now while it’s available.”
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.