Australians earning around the $280,000 mark annually may currently receive superannuation contributions which in aggregate exceed their concessional contributions cap. A bill currently before parliament looks to correct that, by way of an application to the ATO for an exemption from the superannuation guarantee from 1 July this year.
The application can be made by taxpayers with more than one employer, who expect their income for SG purposes to exceed $263,157 for the financial year. The application will need to be made annually, and at least 60 days before the start of the quarter the exemption will apply to.
KPMG partner Adam Gee said there looks to be “no reason” this measure won’t pass, and is confident it’ll be an easy win for wealthy clients.
“I can’t imagine it’s not going to get bipartisan support,” Mr Gee told SMSF Adviser. “It’s part of a package that I don’t think there will be too much conjecture over,” he said.
“Realistically, all the sector has to do is opt out and provide confirmation to their employer that they don’t wish for contributions to be made, it’s not difficult, and the fund is just a receiver so they don’t need to do anything. There’s a small administrative impact potentially within payroll systems,” he said.
The move also opens doors to new salary arrangements. The amount paid by an employer to their affected employee will not be impacted, meaning the employee can pocket the extra 9.5 per cent in the form of regular income.
katarina.taurian@momentummedia.com.au
