Jane Hume (Victoria, Liberal Party, Minister for Superannuation, Financial Services and the Digital Economy) Share this | Hansard source

This amendment to the Treasury Laws Amendment (More Flexible Superannuation) Bill 2020 would remove the excess concessional contributions charge, which is known as the ECC charge, for people who exceed their concessional contributions cap. The ECC charge is just over three per cent—3.01 per cent is currently applied to the tax liability on excess contributions to super that are in breach of the concessional contributions cap. Removing the ECC charge to excess super contributions will help simplify the superannuation system and also cut red tape. It's imposed on people even when they breach their cap through no choice of their own, such as in situations where their employer pays more than the 9.5 per cent superannuation guarantee rate. Twenty-six per cent of employees are currently on agreements where their employer pays in excess of 9.5 per cent. The proposed amendment would remove the ECC charge but leave intact the existing integrity arrangements which ensure that any excess contributions continue to be taxed appropriately at an individual's marginal tax rate.