Divorce settlements exempt from super plan

The federal government has indicated it would exempt divorce settlements from plans to cap non-concessional superannuation contributions at $500,000.

Treasurer Scott Morrison believes divorce payouts are an "appropriate exemption" from the government's controversial super plan.

"But you've got to get the detail of that right and you've got to work it through properly so we don't create any unintended consequences," he told Sky News on Thursday.

He denies one of those consequences could be an incentive for couples to get divorced to avoid tax on more of their super contributions.

"I think that's a ridiculous suggestion," he said.

Government plans to cap non-concessional contributions have drawn criticism from some within the coalition.

Mr Morrison ruled out exempting inheritance and lottery payments.

Labor said the government should work out the final plan instead of testing things piece-by-piece.

"These sorts of bite-sized announcements ... to see how they run in the media is not really a way we can engage properly with the government," opposition frontbencher Brendan O'Connor told ABC radio.