Aviva is pleased that the government has provided certainty around the issue of access to superannuation benefits regarding preservation age limitations.
Aviva have started to see a decline in voluntary super contributions resulting from a fear that the access age may increase in line with the aged pension access age. The Prime Minister’s announcement that this would not occur should provide investors with some comfort.
Aviva’s Martin Breckon, technical marketing manager, said: "The changes to contribution caps means that investors only have until the June 30 to take advantage of the old caps. It was important that the government provide this certainty around access age so that they can feel comfortable taking advantage of this limited opportunity in the current financial year."
In the May budget, the government announced a reduction in concessional contribution caps from A$50,000 per annum to A$25,000 for people under 50 years from 1 July 2009. Even though the non-concessional caps have remained untouched the reduction of the concessional contribution caps means that there is even less opportunity for last minute catch-up strategies.
Mr Breckon also added: "Many previously effective ‘cash-flow oriented’ pre-retirement strategies, which are of significant value to middle Australia, will now have to be revisited. This is because the reduced caps have to be considered in conjunction with the inclusion of salary sacrifice contributions for income testing purposes of both tax and Centrelink benefits.
"Consequently for many people certainty of future outcomes within the superannuation system is vital if they are to maintain their faith in the system. A reduction in the concessions for middle Australia and an extension in the preservation of capital adversely impacts attitudes. Consequently the Prime Minister’s announcement is most welcome."
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For more information:
Ariana Alvarenga
Public Relations
Phone: (03) 9829 8985
Mobile: 0409 187 487
Sue Voglis
Research & Public Relations Manager
Phone: (03) 9829 8057
Mobile: 0408 309 247
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