Calls to scrap ‘discriminative’ 10 per cent rule
In its pre-Budget submission, the Institute of Public Accountants (IPA) is pushing the government to review the “discriminative” ‘10 per cent rule’ which it says restricts Australians from making personal concessional contributions into their superannuation.
Currently, if a taxpayer earns more than 10 per cent of their total income from employment services, they are unable to make personal concessional contributions to their superannuation from other sources of income, the IPA stated.
IPA chief executive Andrew Conway said the 10 per cent rule is “unnecessary and inequitable” for a number of Australians.
“A taxpayer earning income from other sources who also works part-time to supplement their income is limited to the superannuation contributions made by their employer,” he said.
“For example, if a part-time worker is earning $15,000 but also earns income from other sources, the maximum concessional superannuation contribution will be $15,000 if he or she is able to salary sacrifice their entire employment income,” he added.
Mr Conway believes the 10 per cent rule only works to “discriminate” against the source of the contribution.
“We need to encourage Australians to prepare for their retirement and not deprive them of superannuation concessions,” he said.
“The IPA believes the source of the concessional contribution should not matter and this is one piece of legislation that should be repealed,” he added.
“Access to the concessional super caps should not discriminate based on individual circumstances.”