Monthly technical briefing - April 2026

As noted in last month’s technical briefing, the Government introduced two bills to Parliament containing the revised Division 296 rules. These bills have now passed both houses of Parliament, received Royal assent on 13 March 2026 and these new measures will now commence from 1 July 2026.

The new law allows for regulations to be made that provide detail in relation to certain provisions. Treasury has now released the draft regulations for consultation. Areas covered by these draft regulations include:

• Prescribing a factor for the purpose of the transitional arrangements that will adjust the net capital gains component used in working out the Division 296 earnings of complying superannuation funds (other than small superannuation funds) and Pooled Superannuation Trusts for the first four transitional years.
  
  This factor applies to assets held at 30 June 2026 and is relevant to many large super funds, including most retail super funds.
  
  The proposed factors are:
  
  

  Year of CGT event	Factor
  2026-27	0.2
  2027-28	0.4
  2028-29	0.6
  2029-30	0.8

  
  As an example, if a super fund’s net capital gain is $100,000 for 2026-27, it will be reduced to $20,000 (i.e. $100,000 x 0.2) when working out earnings for Division 296 tax purposes.
  
  
• Setting rules for how Division 296 fund earnings are to be attributed to members on a fair and reasonable basis for funds that must use the general attribution method (e.g. large superannuation funds that have an account balance attributed to the member). The draft explanatory material supporting the draft regulations states that ‘it is expected that funds will be able to draw on existing practices and methodologies for attributing earnings to interests, such as unit pricing, providing this is fair and reasonable, having regard to prescribed matters.’
  
  A new concept, not alluded to in the consultation to the new law, is the attribution of earnings that relate to the year(s) post death. The new law states that an individual’s total super balance will be nil at the 30 June of the year of death. On this basis it was thought that earnings that relate to subsequent years will not be subject to Division 296 tax. The draft regulations however will modify the earnings of the deceased in the year of death to include subsequent earnings until the earlier of the time:
  • All death benefits have been paid from the account
  • A beneficiary receives a death benefit pension from the account
    
    
• Modifying the operation of sections 296-65 which deal with working out an individual’s relevant superannuation earnings. This applies to small super funds (e.g. SMSFs) and contains requirements, such as:
  • The formula for calculating the earnings, as follows:
    
    

    Division 296 fund earnings for the fund for the fund year

    X

    Average total superannuation balance value of the relevant interest Average sum of the total superannuation balance values of all of the superannuation interests in the fund

    
    Where:
    
    average sum of the total superannuation balance values of all of the superannuation interests in the fund means the average for the fund year of the sum of the total superannuation balance values of all superannuation interests in the fund.
    
    average total super annuation balance values of all of the relevant interest means the average for the fund year of the total superannuation balance value of the relevant interest.
    
    
  • The circumstances when a small super fund will not need an actuarial certificate for the calculation of earnings, including the fund only has one member for the whole year or the fund has no Division 296 earnings.
  • Specifying that the deceased’s super account will continue to be included in the calculation of their ‘average total superannuation balance value’ (refer formula above) in the year of death where the beneficiary receives the death benefit as an income stream. It is excluded from the deceased’s ‘average total superannuation balance value’ once the account becomes a death benefit income stream.
     
• Providing detail as to how earnings are to be calculated for defined benefit accounts that are not in the retirement phase (e.g. defined benefit accumulation accounts) and certain other prescribed funds.
  
  For these accounts, earnings are calculated by a change in the individual’s ‘total superannuation balance value’ over the year and are adjusted to remove contributions and add back withdrawals.
  
  The draft regulations outline how the contributions and withdrawals are calculated. In addition, the adjusted earnings amount is to be multiplied by a factor. The draft regulations specify this factor to be 0.825 and was based on advice from the Australian Government Actuary.
  
  
• Setting out circumstances where a non-member spouse is to be treated as having a superannuation interest where the member spouse’s interest is the subject of a family law payment split.

The consultation closes on 7 April 2026.

Further information can be found here:

Treasury draft regulations consultation

Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026

Superannuation (Building a Stronger and Fairer Super System) Imposition Bill 2026

Accompanying the Bill containing the Division 296 tax was a section aimed at aligning the calculation of LISTO to the relevant legislative settings. The changes include:

• An increase to the income threshold from $37,000 to $45,000 – the change will link the income threshold to a personal income tax rate threshold
• An increase to the maximum LISTO from $500 to $810 – based on current rates and thresholds.

The Bill has now passed both houses of Parliament and will commence from 2027-28.

Further information can be found here:

Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026

As noted in the last months’ technical briefing, Treasury consulted on helping victims and survivors of child sexual abuse access the offender’s super for court-ordered compensation payments. On 25 March 2026 a Bill containing these measures entered Parliament.

The Bill introduces a framework enabling victims and survivors of specific child abuse offences to access a perpetrator’s superannuation funds to satisfy outstanding compensation orders.

A key aim is to prevent superannuation from being utilised as a means to shield a perpetrator's assets from these compensation claims.

Furthermore, the Bill ensures that compensation debts are to survive in the event of a perpetrator's bankruptcy, improving the enforcement prospects for victims and survivors.

Further information can be found here: Treasury Laws Amendment (The Survivors Law) Bill 2026

The Federal Government has initiated public consultation on significant reforms to the education standards for financial advisers. The proposed changes aim to establish a more sustainable and flexible pathway for new entrants, directly addressing the decline in adviser numbers in recent years.

In its announcement, the Government linked the inability of consumers to access quality, trusted financial advice with an increased susceptibility to predatory lead generation and high-pressure sales tactics.

This latest policy initiative is positioned alongside the consultation paper on managed investment scheme (MIS) reform released in February and foreshadows further work on consumer protection within the superannuation sector, which is expected to be released for consultation shortly.

A New Entry Standard

The core of the proposal is a new standard designed to streamline entry into the profession while retaining a foundation in tertiary education. Under the proposed framework, prospective advisers will be required to:

• Hold a bachelor’s degree or a higher qualification.
• Complete at least four financial concepts subjects at an AQF Level 7 or higher. The proposed list of study subject options are:
  • Financial Advice Principles and construction (including advice related fintech)
  • Finance and Finance Law
  • Superannuation and Retirement Planning (including SMSF)
  • Banking and Investments
  • Insurance Planning and Risk Management
  • Accounting
  • Aged care advice
  • Economics/Econometrics Estate Planning and Estate Law
  • Actuarial Science
  • Trust Law
  • Mathematics/Statistics
  • Taxation and Taxation Law
  • Agribusiness/Agricultural economics
  • Business Law and Commercial Law
• Complete at least four mandatory financial advice subjects covering:
  • Ethics for Professional Advisers
  • Financial Advice Regulatory and Legal Obligations
  • Client and Consumer Behaviour
  • Financial Advice Fundamentals

The Government has confirmed that these reforms will not impact the existing professional standards. Requirements for completing a professional year, passing the financial adviser exam, and adhering to continuing professional development (CPD) obligations will remain in place.

The chart below compares the current and new pathways:

Source: Figure 2 from the Government’s Education Reform for Financial Advisers Consultation paper (link below)

These reforms are a key component of the Government’s broader ‘Delivering Better Financial Outcomes’ package, which seeks to address the supply shortage of financial advisers and bolster the industry's capacity to meet future consumer demand.

The consultation represents the next step in what the Government describes as its commitment to delivering a comprehensive package of reforms aimed at increasing Australians’ access to high-quality, safe, and affordable financial advice.

The consultation closes on 17 April 2026.

Further information can be found here: Media release and Consultation

Payday Super

Further to the release of PCG 2026/1 Payday Super – first year ATO compliance approach (covered in last months’ technical briefing), the ATO has now released the following draft law companion rulings regarding Payday Super, for comment:

• LCR 2026/D1: Defining 'Qualifying Earnings': This ruling clarifies the new single earnings base for calculating SG amounts. 'Qualifying earnings' will largely align with the existing concept of Ordinary Time Earnings (OTE), which remains unchanged. It includes payments for ordinary hours, over-award payments, shift-loadings, all commissions, and amounts salary sacrificed to super. The maximum contributions base will also shift from a quarterly to an annual cap.
• LCR 2026/D2: Rules for 'Eligible Contributions': This ruling sets the criteria for a contribution to be considered 'eligible' to reduce an employer's SG shortfall. A key change is the new payment window, requiring contributions to be received by the fund generally within seven business days of the employee's payday. The guidance also provides for extended periods for new employees. Amendments to regulations also confirmed a reduced three-day timeframe for superannuation funds to approve or reject contributions.
• LCR 2026/D3: New Superannuation Guarantee Charge (SGC) Calculation: This details the new, more complex SGC calculation, which will be assessed for each 'QE day' (the day qualifying earnings are paid). The SGC will include daily accruing interest, penalties for late payments, and four main components: the total of individual final SG shortfalls, the sum of all individual notional earnings components, an administrative uplift amount, and any choice loadings.
• LCR 2026/D4: Transitional Arrangements: This LCR covers the shift from the quarterly system. Key rules include the cessation of the late payment offset from 1 July 2026 and specific rules for contributions made in the overlap period of 1-28 July 2026.

Further information can be found here:

LCR 2026/D1

LCR 2026/D2

LCR 2026/D3

LCR 2026/D4

ATO Payday Super resources