SMSF caps 'unworkable': ASMA

The Australian Self-Managed Super Fund Members Association (ASMA) has labelled the Government’s Budget initiatives for concessional contributions caps ‘unworkable’ and likely to ‘drive up costs’.

ASMA director Anna Carrabs said the cost of implementing the changes — such as increasing the concessional cap limits for over-50s with balances less than $500,000 and allowing refunds for excessive concessional contributions up to $10,000 — far outweighed any benefits.

“There is no doubt that implementing the necessary software tracking systems, as well as increased accounting and auditing costs associated with the proposed initiatives will add significantly to members’ costs,” she said.

This coupled with the increased levy will put most members at a disadvantage from the outset, Carrabs added.

Carrabs also questioned how the Government decided on a $500,000 balance cap, stating that there needed to be much greater consultation on what the cap could be.

“Life expectancies of couples over 50 should be assessed to determine an appropriate amount if a cap for the higher concessional contribution threshold is deemed necessary,” she said.

Carrabs also expressed disappointment that the refund for those who make excessive concessional contributions for the first time up to $10,000 would not be retrospective.