As many as 2.6 million people in large superannuation funds will be affected by Labor’s franking credit changes, the Financial Services Council says.

If elected, Labor will make excess franking credits non-refundable, denying some retirees a cash refund at tax time.

While anger over the policy has emanated largely from those with self-managed super funds and some observers have claimed that non-SMSFs will not suffer, the FSC claims more people in large regular funds will be affected than any other group.

“In 2015-16, refunds were worth $235 million to large super funds, with 50 funds receiving refunds,” the FSC says in a submission to a parliamentary inquiry examining Labor’s proposal.

“The average refund was $4.7 million per fund. There were 2.6 million accounts in these funds, so up to 2.6 million Australians benefited from refunds in these funds.” Refunds were larger in 2014-15 at $3.5 million.

The FSC, which represents retail funds such as those owned by the Big Four banks, asked 14 member funds to provide information about franking credit refunds.

Read more in the Australian Financial Review.

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