The Australian Taxation Office uses personal tax-file numbers to keep tabs on retirement savings, including multiple accounts, and could use this to alter the tax treatment of earnings from large funds. “The ATO is now in a much better position to know where your super is,” Ms Vamos said.
The ASFA proposals centre on a “lifetime cap” on the amount each person can put into his or her super funds, preventing the wealthiest workers from taking the lion’s share of the tax breaks.
The ASFA report does not put a figure on the lifetime cap, but the group, which represents most of the big funds in the $1. 8 trillion industry, has previously estimated that a couple would need at least $500,000 in super for a comfortable retirement.
ASFA chief executive Pauline Vamos said the case for change was backed by findings that some personal super funds had swelled to $30m, with no tax applied on the earnings.
Warning that some people have as much as $30m in super accounts, the industry will call today for cuts to the tax breaks on the earnings in large personal funds.
A lifetime cap would limit the amount an individual could put into a fund so the savings did not exceed what people needed for retirement. “You couldn’t do a lifetime cap before because there was no central database,” Ms Vamos said. “Now there is one, so it’s time to look at the idea.
Read more here: Business Spectator