The impact of the proposed $100,000 non-concessional contribution cap on clients is currently the top concern for advisers, with queries on the issue doubling in the past month, according to BT.
BT head of financial literacy and advocacy Bryan Ashenden says the non-concessional contributions caps are easily the most topical query BT is receiving from advisers.
“Advisers are looking to know whether their clients may be affected, how much they can contribute this year and next, and how the transitional arrangements will work where a client has triggered, but not yet fully used their non-concessional contributions under the bring-forward provisions,” Mr Ashenden said.
Advisers are also sending in queries about next year’s pension changes, including the rebalancing of assets test limits.
“The reality is that many clients will likely see some change in their pension entitlements. Advisers are acutely aware of this and quite rightly so,” Mr Ashenden said.
“We’re seeing advisers getting on the front foot and taking the lead to ensure a ‘no surprises’ approach with their clients. We know having those discussions earlier on can make a big difference to clients feeling comfortable with any legislative change.”
The pension asset test changes come into effect on 1 January 2017 and the rebalancing of the assets test is set to make a difference to many clients’ pension entitlements, Mr Ashenden said. This affects two areas – the change in the assets test free threshold and an increase to the taper rate.
“It’s important to note that there is a silver lining. If there are changes to your client’s pension, they will likely be eligible for a low-income care card, and if they’re of retirement age, they will receive the Commonwealth Seniors Health Card,” he said.
Mr Ashenden said SMSF practitioners should be giving clients confidence about their ability to contribute to super this financial year, and engage early with clients about what the changes mean.
“You can start the planning now for when the changes happen, giving more scope to implement the right approach at the right time,” he said.
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