SMSF Owners’ Alliance (SMSFOA) executive director Duncan Fairweather says the lobby group agrees that people who receive compensation for personal injury should be able to contribute large amounts to their superannuation without affecting the balance cap.
However, Mr Fairweather said he was concerned that people who benefit from an inheritance or a court order upholding a statutory right or some other windfall would also be treated more favourably in relation to allowable contributions.
“What is a ‘structured settlement amount’ for the purpose of the total superannuation balance should be defined more precisely in this legislation rather than rely on the more general references in the Income Tax Assessment Act 1997,” he said.
SMSFOA also said where members of SMSFs have uneven balances and one member has more than $1.6 million and the other less, the government should allow the member with the higher balance to transfer the excess to the other member so that the member can make a non-concessional contribution without regard to the work test.
“This would recognise that typically a self-managed superannuation fund is a ‘joint venture’ by couples with both having an equal interest in the outcome though their separate account balances may differ because of differing contribution patterns over time,” Mr Fairweather said.
“The same principle should apply to SMSFs with a different membership structure, e.g. including other family members or partners.”