Financial year end work

With the end of the financial year fast approaching clients and their advisers should check to make sure the minimum pension requirements have been met and that any contributions have been received by the fund by 30 June.

Account based pensions

Make sure anyone receiving an account-based pension from the fund is paid at least the minimum amount which depends on their age. If the pension commenced after 1 July in this financial year the minimum amount is pro-rated on a daily basis it commenced. It is not compulsory to pay the minimum amount for the financial year if it commences on or after 1 June.

Remember that anyone who stops receiving a pension during the year must receive a pro-rated minimum pension calculated on a daily basis up to the time it ceases.

Contributions

It’s important that super contributions are received by the fund on or before 30 June 2025. Any contributions received after that time will count towards the 2025-26 year. This could result in excess contribution tax for that year if the concessional or non-concessional contribution thresholds are exceeded.

If the contributions are made by the transfer of assets (in specie contributions) it is important to ensure they are valued at their market value as required by the ATO guidelines.

Tax deductions for GIC and SIC not available from 1 July 2025

Tax deductions for General Interest Charge and Shortfall Interest Charge have been removed from 1 July 2025 for any charges claimed. This may impact if either charge is imposed on:

  • Employers making late SG payments,
  • SMSFs with late or amended returns, and
  • Members incorrectly claiming deductions for super contributions.

Changes to the Auditor Contravention Report

The ATO has made amendments to the ACR which relate to:

  • The auditor’s exercise of professional judgement which has been updated to clarify when auditors can exercise their professional judgement and whether an ACR is required for market value contraventions for assets held by service organisations.
  • Test 4 where breaches have occurred in one year but have not been corrected Example, section 66 breaches are only required to be reported in the year in which the breach occurred and not in subsequent years.
  • Section E – contraventions which are only required to be reported once compared to those that are ongoing and are required to be reported in subsequent years.

ATO Audit Compliance Focus for 2025

The ATO auditor compliance focus for 2025 will concentrate on:

Market Valuations

  • Insufficient evidence to support the market value of the fund’s assets
  • ATO contacted funds where there is no or little change in value over several years

High Volume audits

  • Auditors who audit at least 1000 audits each year or a sudden increase in the number of funds audited

Disqualified trustees

  • Trustees continue to act while disqualified

High Risk Auditors

  • Referrals to ASIC when not complying with fund audit requirements

Independence

  • Undertaking in-house audits, back-to-back audit arrangements, long associations with clients and concentration of audits from a single referral source.
  • Not meeting Code of Ethics requirements with APES 110

The 2025-26 Federal Budget

The Budget had no new announcements on superannuation except to reconfirm the payment of superannuation from 1 July 2025 on paid parental leave.

Any further changes to super will depend on the outcome of the Federal Election and the priorities of the new parliament.

The information in this article is intended to be general in nature and is not personal financial (or financial product) advice. It does not take into account the objectives, financial situation or needs of you or your client. Before acting on any information, you should consider the appropriateness of the information provided having regard to the objectives, financial situation and needs of you or your client.

In particular, you should seek independent professional advice prior to making any decision based on the information provided in this blog.

You should consider the appropriateness of this information having regard to the individual situation and seek taxation advice from a registered tax agent before making any decision based on the content of this blog.

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