The AFA welcomes the fact that the Government has not sought to make any further changes to superannuation in last night’s Federal Budget.
Phil Anderson, AFA Chief Operating Officer, said the AFA is pleased that there were no detrimental changes to the superannuation system beyond those previously announced on 5 April this year.
“It is important for consumer confidence that short term changes are avoided and we focus on the long term success of our superannuation system in order to encourage greater self reliance in retirement,” he said. “We are pleased to see an increase to the contributions cap for older Australians and the changes to excess concessional contributions,” he said.
Mr Anderson said the increase in the concessional contribution cap to $35,000, which is expected to be implemented from 1 July this year for those 60 and over, and from 1 July 2014 for those over 50, will better allow for older Australians to prepare for retirement, and pave the way towards a more stable superannuation system.
The pilot program that will allow senior Australians to downsize their family home and put the proceeds into a special account, exempt from the pension means testing, has been welcomed by the AFA, subject to further details and consultation.
At the family end of the spectrum, Mr Anderson said financial advisers will need to work with clients, to consider the implications of the changes to family tax benefits and the other budget measures.
“For the average Australian family, the reduction of family assistance benefits and the removal of promised tax cuts means the average family budget will be tighter,” he said. “What is clear from this Budget is that the fiscal position for Australia is challenging and further pressure on the Federal Budget is likely in the near future. Accordingly, access to financial advice will be increasingly important for all Australians”