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New caps can increase super contributions: SMSFA

The changes in concessional and non-concessional contributions caps announced today could mean that some Australians can have additional disposable income to contribute to superannuation, according to the SMSF Association.

From 1 July 2024, the standard concessional contribution cap will increase from $27,500 to $30,000.

The non-concessional contribution cap - which is expressed as four times the standard concessional contribution cap - will also increase from $110,000 to $120,000.

This also means that the maximum available, under the non-concessional contribution bring-forward provisions will increase from $330,000 to $360,000.

Also from this date, the total superannuation balance thresholds used to determine the maximum amount of bring-forward non-concessional contributions available to an individual will be adjusted.

SMSF Association chief executive Peter Burgess said these changes were expected and alongside the Stage 3 tax cuts mean that some may have additional disposable income to contribute more to super.

Burgess told the SMSFA National Conference that the proposed 30% taxation on $3 million super balances could become law by June 30 this year.

"The only questions that remains is whether the government's proposal not to index the cap and to tax unrealised capital gains will survive the scrutiny of the senate cross bench," he said.

"Although there might not be sufficient cross bench support to block this Bill, we hope that they will support amendments which simplify and improve this tax."

Also at the conference, Heffron Consulting managing director Meg Heffron said that many SMSFs will not hit the $3 million mark - yet they still see value in their SMSF, appreciating they are a genuine platform for their retirement savings strategy.

For those who opt to take their money out of superannuation because of this change, Heffron flagged issues that must be considered including the impact of large withdrawals on exempt current pension income (ECPI), not wasting losses and/or negative earnings, and any tax on death benefits.

Read more: SMSFAHeffron ConsultingMeg HeffronPeter Burgess