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Pressure mounts on govt to end 10pc rule

Miranda Brownlee
07 April 2015 — 1 minute read

There have been heated calls from the SMSF industry, including a Deloitte partner, to end the 10 per cent test relating to personal concessional member contributions, with one practitioner labelling it “grossly prejudiced”.

The 10 per cent test prohibits a personal concessional member contribution where the superannuation member earns more than 10 per cent of their income from employment services.

In a LinkedIn forum, F D Browne & Co principal Chris Browne argued that the 10 per cent rule fits the category of a “grossly prejudiced tax law against the relatively small number of taxpayers that it affects”.


“There is no justification for singling this group out as being ineligible for tax concessions which are available to others,” said Mr Browne.

According to Mr Browne, the rule “adversely affects those switching from employment to self-employment or vice-versa within a year”.

“For some it can be very hard to know with any certainty that they have passed the 10 per cent test until after 30 June, by which time it is too late to contribute,” he said.

Financial and Technical Solutions principal Tony Negline expressed a similar view, stating the 10 per cent rule has “achieved very little other than unnecessary complexity”.

“[However,] with the federal Budget under stress I’ll be surprised if the government opens the flood gates on deductibility of super contributions,” said Mr Negline.

Partner at Deloitte Australia Michael Ward said allowing taxpayers to make deductible top up contributions is the first step in giving taxpayers more control over their super.

Superannuation will then be seen with greater relevance by taxpayers, he said.

Meg Heffron, head of customer at Heffron SMSF Solutions, said the test was likely a very crude means of limiting contributions back when limits on contributions were dealt with by limiting the tax deductions available to the contributor rather than imposing a limit on the recipient.

“It’s very clearly unnecessary now that caps are imposed in aggregate at an individual level [and] should have been killed off years ago,” said Ms Heffron.

Miranda Brownlee

Miranda Brownlee


Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.

Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years. 

Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

You can email Miranda on: This email address is being protected from spambots. You need JavaScript enabled to view it.

Pressure mounts on govt to end 10pc rule
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