The government has proposed scrapping one measure in an effort to cut down on complexity and red tape for superannuation members and employers.
In last night’s budget, the government announced it plans to remove the ‘10 per cent rule’ for personal deductible contributions.
“What this means is that anyone, no matter what their employment arrangements are, can make a concessional contribution to super that they will get a deduction for,” the SMSF Association’s head of policy, Jordan George, told SMSF Adviser.
“So, in essence, this means they don’t need to salary sacrifice to make additional contributions above their superannuation guarantee (SG), and this will, we think, really simplify the system for fund members who want to make contributions above the SG amount, and will make it simple for employers because there’s less of a need for them to offer salary sacrifice arrangements,” he said.
The industry has long argued for the removal of the 10 per cent rule, and its proposed scrapping is being widely applauded as a common-sense move from the government.
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