The Federal Government has proposed maintaining the higher concessional contributions cap for members over 50 years with a total super balance under $500,000. This should be a great outcome for many AvSuper members who want to put more into their super savings, however the legislation is yet to get through the current Parliament.
The current arrangement of a maximum concessional contribution per year of $50,000 for members over 50 is due to end on 30 June 2012, so this proposed adjustment effectively preserves the higher limit of concessional contributions for members over 50. There is no change to the annual limit for members under 50.
The proposals allow older members with lower balances to continue building up their super with additional contributions, without having to pay additional tax on those contributions. We believe this change will particularly help AvSuper members who are approaching retirement with only modest super savings, including those who have had career breaks and/or periods of part time work such as women taking time out of the workforce to raise children.
The AvSuper team has been working with our industry associations and representative bodies to lobby for such reforms on your behalf, so our members can be better prepared for their retirement, and we are delighted that the Government has announced these changes, although we’d like to see it further extended so that more members can benefit from the change.
As always, we will keep you informed as this proposal goes through the legislative process.