The concessional superannuation contributions cap for people over 50 should be set at $35,000 instead of $50,000, but should not be dependent on a member's account balance, superannuation and funds management industry associations have said.
The Association of Superannuation Funds of Australia (ASFA), Self-Managed Super Fund Professionals' Association of Australia and Financial Services Council made the recommendation in a supplementary submission to Treasury.
"ASFA has decided to support that decision," ASFA chief executive Pauline Vamos said yesterday.
"We did so for a number of reasons, one of which was the fact that with so many other changes the implementation of the $500,000 threshold was going to be too much at this time," Vamos said.
The implementation of the threshold would be a costly exercise for funds as they would have to make extensive changes to their administration systems, she said.
"We thought the $35,000 was a good holding point and it will still help a lot of low-income earners."
The proposal is currently with Treasury, which has taken the submission under consideration.
Currently, members aged 50 and over can make concessional superannuation contributions of up to $50,000 a year without incurring a liability for excess concessional contributions tax.
But this arrangement is scheduled to expire on 30 June 2012.
The government released in February this year a paper in which it proposed to allow individuals aged 50 and over with total superannuation balances below $500,000 to make up to $50,000 in concessional superannuation contributions without incurring a liability for excess concessional contributions tax.
Under the proposals, members over 50 with more than $500,000 could contribute $25,000.
"We still would have preferred $50,000, but we just need to get this policy through," Vamos said.
The $35,000 cap is calculated to cost the equivalent of what the government's proposals will cost, but would save funds from have to adjust their administrative systems.
