Andrea Slattery

The SMSF Association has called for more equity in superannuation in its 2015 Budget submission.

The Association Chief Executive Officer/Managing Director Andrea Slattery says the submission reflects the Association’s long-held views that low income earners and people with broken work patterns are adversely affected under the current system.

“The Association is firmly of the opinion that the Low Income Superannuation Contribution should be maintained beyond 2017-18 to ensure equitable treatment for the lowest paid workers. We opposed this policy announcement when it was made and still believe it’s the wrong policy decision.

“It’s also our belief that people with broken work patterns, such as women who have to leave the workforce to have children, can often be disadvantaged.

“There is an urgent need to find ways to provide opportunities for people whose working lives are disrupted to ensure a fairer system so they can grow an adequate superannuation balance.

“It’s partly for this reason of broken work patterns that the Association is again calling for higher concessional contribution caps above the current limit of $35,000 for those nearer to retirement.

“From our perspective it’s imperative to give more opportunity for people to make contributions, especially later in life, to ensure adequate superannuation balances to provide for their retirement.”

Slattery says the Association is also arguing for the removal of the 10% rule for tax deductible voluntary contributions to allow those employees who don’t have access to salary sacrifice to be given the opportunity to access tax deductions to super contributions.

“In our opinion this would allow all fund members to make tax deductible voluntary contributions without having to satisfy the ‘10% rule’ that prohibits people from claiming a tax deduction for voluntary contributions when at least 10% of their income comes from being an employee.

“The alternative is that they can only make voluntary concessional contributions through salary sacrifice arrangements.

“In addition, removing the 10% rule would alleviate the red-tape burden for businesses providing salary sacrifice arrangements (especially for small businesses) and for fund members who need to ensure they comply with the 10% rule.”

She says the Financial System Inquiry final report stressed the importance of the need for a bipartisan, long-term approach to superannuation, a position with which the Association fully concurred.

“We want to see a recommitment to the long-term goals of superannuation, and in particular a focus on providing retirement income via the three-pillar system of the age pension, compulsory contributions and voluntary contributions.”

The post SMSF Association’s budget submission calls for more equity appeared first on AdviserVoice.