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An accounting body has urged the government to drop one of its key proposals in its submission on the second and third tranches of superannuation reform, which it believes will disadvantage taxpayers.
The IPA said it does not support the proposal to reduce the cap on concessional contributions, and that the measure would actually be a step backwards.
“The IPA does not support the reduction of the contributions cap to $25,000 and more so, we do not agree to the reduction of the current cap of $35,000 for individuals over 50 years of age,” said IPA chief executive officer Andrew Conway.
“In fact, people aged over 50 should be encouraged to make further superannuation contributions if they have the capacity, to address any superannuation balance shortfall,” he added.
The IPA recommended instead that the concessional cap be raised for older Australians, to empower them to self-fund their retirement.
“The current annual concessional contributions cap of $35,000 for over-50s is less than a third of what the cap was 10 years ago,” Mr Conway said.
“The 2010 Henry Tax Review supported a higher contributions cap for Australians aged 50 and over and we support that position. Reducing the cap is adverse to Australians building a self-reliant retirement.”
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