The number of excess concessional contributions and excess non-concessional breaches of the relevant caps fell in 2010-11.
SMSF Professionals’ Association of Australia (SPAA) Technical Director Graeme Colley says: “Members of super funds and their advisers are increasingly getting a better understanding of the lower concessional contribution caps and many appear to have adjusted accordingly.
“There seems little doubt that members are coming to grips with the changes in the caps and as such it’s likely this welcome decline will continue when we see the Australian Taxation Office (ATO) figures for 2011-12.
“However, it will be interesting to see what happens for the 2012-13 financial year when the concessional contributions cap was reduced to $25,000 for people aged 50 years and older.”
He says the highest average liability for assessments is with excess non-concessional contributions – possibly due to misunderstanding the operation of the $450,000 bring forward rule and also due to the carry-over of excess concessional contributions to the non-concessional contributions cap.
Colley says it appears the ATO exercised discretion in about one third of cases, which was a change from the 2009-10 year when discretion was exercised in about one quarter of cases.
“Despite the falling numbers in 2010-11 and a possible more lenient approach by the ATO, it’s still SPAA’s firm position that the excess concessional contributions regime is fundamentally unfair. It is considered to be extremely harsh on people saving for their retirement and those who, in the vast majority of cases, have simply made a genuine mistake in contributing too much to superannuation.
“This is why SPAA supports the Government’s recently proposed changes to this regime and encourages it to expand its proposed refunding solution to excess non-concessional contributions too.”
The excess contribution assessments raised about $190 million in the 2009-10 financial year, and for the 2010-11 financial year to date just over $100 million has been collected.