Graeme’s Super News – A look back on SMSF in 2025

Read the latest updates from Graeme Colley, a respected educator, policy advisor, and technical expert with over 30 years' experience in taxation and superannuation.

In Graeme’s final update of 2025 – he reflects back on 2025 while adding some thoughts to what 2026 may hold.

Welcome to the end of another year and our last newsletter for 2025. This year has given us some possible changes to super, rulings from the regulators and greater obligations for super fund auditors.

Giving the gift of super

But seeing it’s the festive season and a time of giving, why not give a gift that lasts the test of time, like super. Give yourself a Christmas present by making personal contributions to super, increasing your salary sacrifice or helping family members boost their retirement savings. While contributions to super may not have an immediate impact, they may actually give a substantial long-term benefit.

Good fund administration

When looking back at the year, the main super issues centre on maintaining good fund administration. This includes making sure pensions are paid correctly and that auditors carry out
their professional duties properly.

An important change to anyone receiving a pension is to make sure that at least the minimum amount is paid. Failure to meet this requirement results in the pension ceasing from the start of that financial year, and all payments being treated as lump sums. Anyone wishing to recommence the pension must go through the process of starting a new pension in the next financial year with entirely new documents as well as calculations.

Underpaying the pension means additional income tax for the fund, as the amount supporting the pension will be treated as being in the accumulation phase for the year of the underpayment. Also, there may be transfer balance cap issues when the pension is stopped and if a new pension commences. One good way of making sure at least the minimum amount is paid can be to arrange for direct debits from the fund accounts to the pensioner. That way, there is a greater risk of the pension complying with the rules.

Something for auditors

For auditors, this year provided a number of salient lessons from the regulators and the courts as they took a tougher line on the need to maintain records and gather appropriate evidence in support of the auditor’s conclusions. Failure to meet these requirements resulted in many auditors being disqualified to audit an SMSF.

If you’ve been in this position before and are looking to avoid this in 2026, you should consider speaking to the team at Cloudoffis, whose technology helps maintain records in the cloud.

Division 296

The reannouncement of Division 296 tax on the increase in super balances above $3 million raised it’s head again. However, changes were made due to the reaction of the public and professional associations. The result was a rework of the basic proposed rules to include a second threshold of $10 million, indexation of the thresholds as well and including only realised gains in the calculation.

It is expected that the Division 296 proposal will show its head again early next year and be passed in time for it to commence on 1 July 2026. It will be interesting to see whether it will make it into law and how the changed proposal will operate.

Payday Super

Unlike the Div 296 tax, Payday Super is law and will commence from 1 July 2026. That legislation requires employers to pay super contributions at the same time as an employee’s salary and wages. In view of the effort required by employers to upgrade their payroll systems, the legislation provides a transitional period to comply with the new law. A draft of the ATO’s compliance approach in the first year of Payday Super for the 2026/27 financial year is published in PCG 2025/D5.

So summing up, it’s been another challenging yea,r and next year looks like it will be no different as we do our best to comply with the continuous changes in super. All the best for the holiday season.

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