Planning is key as SMSFs enter new phase

Self-managed superannuation funds (SMSFs) have long been associated with older Australians and small business owners looking for greater control over their retirement savings.

But recent data suggests the sector is undergoing a quiet transformation.

Alongside tax reforms and persistent compliance challenges, younger people are slowly moving into the SMSF space. While 85 per cent of SMSF members are 45 years or older, there’s been significant growth in members aged between 25 and 34 years from just 2.4 per cent two years ago to around 10 per cent now.i

Almost 8,000 new SMSFs were established in the three months to the end of March 2025 with the number of new members increasing by 13,000. Australia’s SMSFs hold an estimated $1.02 trillion in assets with 26 per cent invested in listed shares and 16 per cent in cash and term deposits.ii

A new tax era

The new Division 296 super tax, due to apply from 1 July 2025, is aimed at those with total superannuation balances exceeding $3 million. An extra 15 per cent tax will apply to earnings on the portion of a member’s balance above $3 million, effectively lifting the tax rate on those earnings to 30 per cent.

What makes Division 296 particularly contentious is the inclusion of unrealised gains. For example, a share portfolio the SMSF holds has seen positive returns. Trustees may face tax liabilities on paper profits, even if assets haven’t been sold. This may cause issues for SMSFs holding illiquid assets such as property or farmland that has increased in value.

SMSF Australia and other industry bodies have raised concerns about fairness, complexity and the potential for unintended consequences.

Trustees with high balances should begin planning now before 30 June 2026, to consider asset rebalancing, contribution strategies and the timing of withdrawals. SMSF Australia recommends obtaining advice about your specific circumstances.iii

The advice gap

Despite the increasing complexity of SMSF regulation, the vast majority of trustees continue to operate without professional advice. While the number of SMSFs using financial advisers has grown to 155,000, up from 140,000 in 2023, some 483,000 are not using a financial adviser.iv

This could lead to costly mistakes, especially when navigating contribution caps, pension strategies or related-party transactions. SMSF Australia says that while there’s no legal requirement to obtain advice from a licensed financial planner, “unless you have the skills and expertise to do this yourself, it is certainly conventional wisdom to do so”.v

The compliance burden

Every SMSF must undergo an annual audit by an approved SMSF auditor. This includes verifying the fund’s financial statements and ensuring it is compliant with super laws. Trustees are also required to value all fund assets at market value as at 30 June each year, using objective and supportable data.

For property and other complex assets, valuations can be time-consuming and costly. The ATO recommends using qualified independent valuers when assets represent a significant portion of the fund or are difficult to assess. Auditors may request evidence such as comparable sales, agent appraisals or formal valuation reports.vi

Failure to maintain accurate records or provide sufficient documentation can result in audit delays, contraventions or penalties. Trustees must also ensure their investment strategy is regularly reviewed and documented, particularly when starting pensions or making significant contributions.

Looking ahead

As the SMSF sector evolves, trustees face a dual challenge: adapting to new tax rules and maintaining rigorous compliance. For those considering an SMSF – or already managing one – the message is clear. Getting financial advice can give you peace of mind when the rules are regularly changing.vii

With Division 296 to contend with and a younger demographic stepping in, the sector is poised for both growth and greater scrutiny.

Whether you’re a seasoned trustee or just starting out, now is the time to review your fund’s structure, seek expert guidance and ensure your paperwork is in order. The future of SMSFs may be more dynamic than ever, but it will also demand greater diligence.

Contact us if you have any questions.

i Highlights: SMSF quarterly statistical report March 2025 | Australian Taxation Office

ii Self Managed Superannuation Funds – SMSF quarterly statistical report March 2025 – Data.gov.au

iii Understanding Div296 I How will taxation of unrealised gains work

iv New SMSF trustees propel uptake of financial advice, but $1 trillion sector still has significant advice gaps | Vanguard Australia

v What are the rules for Financial Planners giving SMSF Advice? – SMSF Australia

vi SMSF administration and reporting | Australian Taxation Office

vii About SMSFs | Australian Taxation Office

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RBA Announcement – August 2025

At its latest meeting, the Reserve Bank Board announced it was lowering the cash rate from 3.85 per cent to 3.60 per cent.

Please click here to view the Statement by the Monetary Policy Board: Monetary Policy Decision.

With the official rate change, we’re watching closely what the banks do with their rates, as some of Australia’s biggest lenders may make changes to their rates.

You will be notified directly by your bank if and when they change their interest rate.

Please get in touch if you would like to discuss recent rate movements or if you would like to review your finance options.

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Market movements and review video – August 2025

Stay up to date with what’s happened in the Australian economy and markets over the past month.

Interest rates and tariffs continue to influence markets globally.

After the RBA’s surprise move to leave rates on hold at its July meeting, soft inflation data has paved the way for a future rate cut.

The ASX 200 climbed to a fresh record high during the month of July. Wall Street also recorded all-time highs as tariffs begin to be locked in and AI investment takes off.

Click the video below to view our update.

Please get in touch if you’d like assistance with your personal financial situation.

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New financial year, new super rules 

With a new financial year underway, now’s the time for small business employers to check they’re across the latest changes to super obligations – from Superannuation Guarantee (SG) increases to updated balance contribution caps. 

Here’s a brief roundup of the super changes you need to be aware of from 1 July 2025. 

SG rate rises to 12% – what it means for you 

A key change small business employers need to be aware of is the increase in the SG rate to 12 per cent. 

This means you need to contribute a minimum of 12 per cent of your employees’ ordinary time earnings to their chosen super account. (Obviously, if your eligible employees have a higher percentage listed in an award or employment agreement, you need to pay this higher amount).i 

You should ensure all super and payroll calculations reflect the increased rate. 

Employees making voluntary contributions or salary-sacrificing should be encouraged to review their super arrangements to avoid exceeding their annual contributions caps. 

Make sure no employee is missed 

Now is a good time to check you are paying SG for all eligible employees. Before 1 July 2022 you didn’t have to pay SG for workers earning less than $450 a month. But you now have to pay super, regardless of how much they earn. 

Generally, all employees must be paid super, despite their employment status. This includes full-time, part-time and casual workers, temporary residents such as backpackers, company directors and family members. 

If an employee is under 18 years, SG must still be paid when they work more than 30 hours in a week. 

Reduced SG base for high-income employees 

The higher SG rate also affects the indexed maximum super contribution base used to determine the maximum quarterly limit for a high-income employee’s earnings base. 

From 1 July 2025, the quarterly maximum super contribution base is $62,500, which means the maximum SG payment amount per quarter is $7,500. The new limit is a decrease from the 2024-25 quarterly limit of $65,070. 

As an employer, you are not required to pay SG on the part of your employee’s earnings above this quarterly limit, so review your payroll settings to ensure they reflect the reduced cap. 

Annual contributions caps remain stable 

While knowing these super changes is important, it’s also essential to know what is not changing on 1 July 2025. 

The annual concessional contributions cap remains at $30,000, while the non-concessional contributions cap stays at $120,000. This means the three-year bring-forward cap also remains at $360,000 (The bring-forward rule allows those who are eligible to pay up to three years of after-tax super contributions in one year).ii 

While you’re not responsible for tracking employees’ contribution caps, it’s important to understand them because they may affect staff making voluntary contributions or salary sacrifice arrangements. 

Suggest that employees track all contributions entering their account and consider adjusting their super arrangements if they are nearing their annual cap. 

Balance caps increase 

The other key changes to be aware of is the increase in the general transfer balance cap (TBC) from $1.9 million to $2 million from 1 July 2025. The TBC is the limit on the total amount of super that can be transferred to the retirement phase. 

The total super balance cap (TSB), which includes all of an employee’s super and retirement phase accounts, is also increasing to $2 million. This cap is used to determine eligibility for non-concessional contribution and bring-forward arrangement amounts, carry-forward concessional contributions, spouse tax offsets and government co-contributions. 

The cap increases do not directly affect employers, but they may influence an employee’s decision on making additional super contributions or moving into retirement. 

If you would like more information about the new super obligations for 2025-26, contact our office today. 

i Super guarantee | Australian Taxation Office 

ii Concessional contributions cap | Australian Taxation Office 

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5 steps towards a financially fit retirement

If retirement is just around the corner, the current financial climate may make you feel a little uneasy. Watching the markets fluctuate might leave you worrying about whether your superannuation will be enough to see you through.

It’s not a time for hasty moves, though.
If you are concerned a calm review of your current portfolio and investment strategy may be helpful.

After all, the average Australian spends around 20 years in retirement, so it’s important to create a retirement strategy that takes account not only the current market conditions but also the risks and opportunities in the years ahead.

As one of the most significant retirement assets, your superannuation needs a carefully considered assessment as you approach any new life stage.

Here are five useful tips to help ease you into the next chapter towards retirement.

1. Review your risk profile and portfolio allocation

Check your super portfolio’s risk profile. Generally speaking, investors take a high-growth approach when they’re younger to take advantage of higher returns, however, as with normal share market cycles, there will be fluctuations in the share market. Having a long-term strategy gives you the time to recover from any market downturns before retirement.

Older investors may prefer a more conservative investment strategy that can help to stabilise returns by potentially protecting super from share market volatility.

2. Calculate retirement expenses

Be realistic about the living expenses you’ll need when you finish working. For some, it may cost less to live in retirement because of reduced expenses such as commuting costs and maintaining a work wardrobe.

On the other hand, you may plan to travel more or buy a new vehicle or renovate your home, so these expenses need to be factored in when working out how much you’ll need.

According to the Association of Superannuation Funds of Australia (ASFA), the annual average budget to maintain a comfortable lifestyle in retirement is $73,077 for a couple and $51,805 for a single person.i

And to maintain a modest lifestyle, ASFA estimates a couple will need $47,470 and a single person will need $32,897. Both estimates assume you already own your own home.

You can find easy-to-use tools on the MoneySmart website to help you work out your budget and also estimate your income from super and the Age Pension.

3. Take action on mortgages and loans

Entering retirement with manageable or small levels of debt can contribute to feeling more financial stable.

If you’ll still be repaying a mortgage after you’ve retired, you could consider downsizing your home or using superannuation funds to pay down the debt, keeping in mind the tax implications and ensuring that you comply with superannuation laws. If you’re considering either of these courses of action, we’d be happy to explain your options and obligations.

4. Check your timing

Understanding when and how you can access your super is important.

You can use your super to fund your retirement when you reach “preservation age”, which is from age 60. You can also use your super to begin a transition to retirement income stream (TRIS) while continuing to work.ii

Alternatively, if you continue working beyond preservation age, you can withdraw your super once you turn 65.

There are also some circumstances in which you can access your super early such as illness and financial hardship, however, eligibility requirements do apply.iii

5. Decide how to withdraw your funds

You may be able to withdraw your super in a lump sum, if your fund allows it. This could be the entire amount you have invested, or you could receive regular payments.

If you ask your fund for regular payments (paid at least once a year), it is known as an income stream and your super account transitions from the accumulation phase – where contributions are made – to a pension.

There are minimum withdrawals that you must make once you commence an income stream from super. For example, for those aged under age 65, a minimum annual withdrawal of 4 per cent of your super balance is required and this drawdown rate increases as you get older.iv

There is a lot to think about as you approach retirement, so if you’d like to discuss your retirement income options, please give us a call.

i ASFA Retirement Standard, December 2024 – The ASFA Retirement Standard – ASFA

ii Super withdrawal options | Australian Taxation Office

iii When you can access your super early | Australian Taxation Office

iv Payments from super, April 2025 – Payments from super | Australian Taxation Office

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ATO watchlist for small business breaches

Pandemic-era leniency is a thing of the past and the regulator is warning small and medium enterprises (SMEs) it is keeping an eye on them.

Information is now published quarterly on the ATO’s SME focus areas webpage. The focus areas currently include – deductions and concessions, personal use of business income, operating outside the system and poor reporting habits.i

Business not personal income

Incorrect use of business money and assets is a perennial issue for the ATO, but it is reporting an increased use of business money and assets for personal purposes.

The ATO says the main area where SMEs are making errors relates to the integrity rules in Division 7A of the Income Tax Assessment Act. These rules apply when a private company attempts to provide money or other benefits to its shareholders or their associates tax-free.

According to the ATO, common errors in this area are caused by shareholders (both owners and associates) failing to understand the company is a separate legal entity and its money and assets do not belong to them and cannot be used for private purposes.

Failing to meet Division 7A requirements when making, repaying or managing loans to shareholders and associates is also attracting the ATO’s attention.

A private company making these types of loans must meet a number of requirements, including – entering into a complying loan agreement, charging interest at the benchmark interest rate, declaring the interest in the shareholders’ assessable income, and making repayments by 30 June (see Case Study).ii

Incorrect deductions and concessions

The ATO has also turned the spotlight onto those who incorrectly claim and offset business losses against other income sources.

Some taxpayers are claiming losses from a business activity (as either a sole trader or an individual in a partnership) where the activity is not related to their primary source of income.

Non-commercial business losses (NCL) cannot be offset against assessable income earnt from other activities in the year in which the losses are made.iii

Operating outside the tax system

Although taxi, limousine and ride-sourcing services have been on the ATO’s hitlist for some time, there is a continuing focus on businesses operating outside the tax system.

Operators in this area must register for GST regardless of their annual turnover and ensure they collect and pay GST and income tax on all rides and other business income.

The ATO is using a range of data sources to check that all drivers register for a Tax File Number (TFN), Australian Business Number (ABN) and the Goods and Services Tax (GST).

Drivers choosing not to register or comply with GST and income tax obligations may find the ATO itself registers them for GST and backdates their registration.

Contractor income and TPRS

The ATO is also checking on contractors who incorrectly report or omit contractor income.iv

The taxable payments reporting system (TPRS) now covers building and construction, courier, cleaning, IT, road freight and security services. These businesses must now lodge a taxable payments annual report covering contractor payments.v

Building good habits

The final area of current focus is changing small business GST reporting from quarterly to monthly.

From March 2025, those with a history of failing to comply with their reporting obligations will receive written communications from the ATO notifying them their reporting cycle has changed to monthly.

Targets of this action will be businesses who failed to respond to previous ATO communications and who have demonstrated a poor compliance history (such as paying late or the incorrect amount, failing to lodge or lodging late, and reporting their tax obligations incorrectly).

The shorter monthly reporting cycle change is designed to embed good business habits into the targeted business by better aligning reporting with their reconciliation process. According to the ATO, some SMEs have voluntarily moved to monthly GST reporting to improve cash flow management and keep their recordkeeping accurate.vi

Please give us a call if you are concerned about any of these issues so that we can help you decide on the best course of action.

i Small business focus areas | Australian Taxation Office

ii Loans by private companies | Australian Taxation Office

iii What is a non-commercial loss? | Australian Taxation Office

iv Contractors omitting income | Australian Taxation Office

v Taxable payments annual report (TPAR) | Australian Taxation Office

vi Good business habits | Australian Taxation Office

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MONEY TALK PLANNERS TO JOIN RGM

RGM are proud to announce that financial advisory firm Money Talk Planners will be joining forces with RGM come the 1st of July 2025.

Money Talk Planners is a locally, family-owned financial planning business based out of Morwell that has been in operation for over 30 years. It has a reputation of providing high quality advice to its clients in a professional manner; values that underpin the services we provide at RGM. With the move, the entire Money Talk Planners team will reside in our Traralgon office.

There will be no change to the existing service provided to all our financial planning and accounting clients. Joe Auciello, Partner of over ten years in both our accounting and financial planning divisions, explains why RGM sought out this alliance. “In the ever-growing financial advisory sector, it is imperative that as a business, we look at strategic moves to ensure we can bolster our service offering to existing and new clientele. The Money Talk Planners team will bring their own ideas across to RGM that we look forward to incorporating into our business. Over the past two years we have been diligently working in the background to ensure that this move puts RGM at the forefront of financial planning in Gippsland both now and into the future”.

As part of the move, MTP practice principal Tony Salvatore and financial advisor Adrian Salvatore will join the ownership group of RGM. With over 30 years of financial of financial planning experience, Tony is excited about the move. “Both businesses have shared values, and we will be able to offer enhanced resources, greater financial guidance and invest quality time with our clients. It will be business as usual.”

We formally welcome the Money Talk Planning team across to RGM and we’re all excited in what the future holds!

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Big changes ahead for Aged Care

The number of Australians aged over 65 is expected to more than double in the next 40 years while the number of people aged over 85 is predicted to triple in that time.i

Aged care funding and services have seen major changes in the years since the 2021 report of the Royal Commission into Aged Care Quality and Safety, and this year is no exception.

1 July 2025 marks the start of a host of new programs and improvements for the aged care sector. Several announcements have already been made this year, covering wage rises for aged care workers and nurses, and an increase in government funding for residential aged care accommodation.

In one of the most significant changes, the new Aged Care Act begins on 1 July. The Act aims to ensure the viability and quality of aged care.

A report by the Aged Care Taskforce last year calculated the residential aged care sector will need $56 billion by 2050 to upgrade facilities and build more rooms.

Current funding arrangements aren’t working. In the 2022-2023 financial year, almost half of all accommodation providers made a loss.

Some $300 million in federal grants will be delivered to accommodation providers this year to help with capital works upgrades.

And to improve the viability of the facilities the government is introducing other measures including larger means-tested contributions from new entrants and a higher maximum room price that is indexed over time.

Aged Care Minister Anika Wells says half of new residents will not contribute more under the new consumer contributions.

“For every $1 an older Australian contributes to their residential aged care, the government will contribute an average of $3.30,” says Wells.

Support at Home

The Aged Care Act also aims to support more people who want to stay in their own homes as they age. The federal government is investing $4.3 billion in a new Support at Home program, which replaces the Home Care Packages and the Short-Term Restorative Care programs.ii

There’ll be more than 300,000 places available over the next 10 years and a shorter waiting period for Support at Home, and there’s a goal to simplify and improve the assessment process, making it easier to access different services as needs change.iii

Similar to the Home Care Package, Support at Home will provide:

  • clinical care, such as nursing and occupational therapy,
  • help with maintaining independence including showering, dressing and taking medications, and
  • support for everyday living tasks such as cleaning, gardening, shopping and meal preparation.

The government will pay 100 per cent of clinical care costs while Support at Home recipients will make a contribution towards independence and everyday living costs. The contribution amount will be calculated using the Age Pension means test and it depends on the level of support needed and the combination of income and assets. The highest classification with the most funding will receive a package of services worth $78,000 per year. There’ll also be funding for assistive technology and home modifications and end of life care.

A new cap on contributions will also apply. No one will pay more than $130,000 in their lifetime – whatever their means or length of care at home or in residential accommodation.

Refunding deposits

The new Aged Care Act also requires aged care accommodation providers to refund residents’ lump sum deposits within 14 days if they move to another facility or pass away. Interest must be paid on the lump sum until the amount is repaid. As before, some deductions are permitted provided they were included in the original agreement.

No disadvantage

For those already receiving home care packages or in aged care accommodation, the government says a ‘no-worse-off’ principle will provide certainty that they won’t have to pay more under the new laws.

Whether it is you or a loved one who is considering moving into aged care, it can be an emotional time. With these new changes being implemented, you may have a few questions. Please give us a call if you’d like to hear more about the changes or if we can help to assess your next step or plan ahead.

i Once in a generation aged care reforms | Health Portfolio Ministers | Australian Government Department of Health and Aged Care

ii Support at Home program | Australian Government Department of Health and Aged Care

iii About the Single Assessment System for aged care | Australian Government Department of Health and Aged Care

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Federal Budget 2025-26: Spotlight on tax

In the shadow of an upcoming election, Jim Chalmers’ fourth Budget delivered small but unexpected tax cuts for all Australian taxpayers.

The modest cuts were delivered against a backdrop of growing economic uncertainty, with the treasurer emphasising the need for national resilience in the face of rapid global change.

Tax cuts for everyone

In a surprise revelation, the treasurer announced two new tax cuts in the 2025 Budget.

The first is a cut in the lowest personal income tax rate, which covers every dollar of a taxpayer’s income between $18,201 and $45,000. The current 16 per cent rate will reduce to 15 per cent in 2026-27 and be lowered again to 14 per cent from 1 July 2027.

According to the government, the reduction will take the first tax rate down to its lowest level in more than half a century. Combined with the 2024 tax cuts, an average earner will be paying $2,190 less in 2027-28 compared with 2023-24.

The second tax cut is an increase of 4.7 per cent to the Medicare low-income threshold for singles and families. This means the Medicare Levy will not kick in until singles earn $27,222, rather than the current $26,000 level. The threshold for families will rise from $43,846 to $45,907, while single seniors and pensioners will have their threshold increase from $41,089 to $43,020.

Energy relief for small business and households

The Budget also provided small businesses and households with a welcome additional energy bill rebate to cope with the burden of high energy costs.

Around one million eligible small businesses will receive an additional $150 directly off their energy bills from 1 July 2025. This will extend the government’s energy bill relief until the end of 2025, as the previous rebate scheme was due to end on 30 June.

Abolition of non-compete clauses and licensing reform

Some businesses may be less pleased with the Budget announcement of a planned ban on non-compete clauses covering low- and middle-income employees leaving for another business or to start their own.

Competition law will be tightened to prevent businesses making arrangements that cap workers’ pay and conditions without their knowledge or agreement, or that block them from being hired by competitors. The government claims this will increase affected employees’ wages by up to 4 per cent as they will be able to move to more productive, higher-paying jobs.

Work will also begin on a national occupational licence for electrical trades, which is intended to provide a template for other industries where employees are currently restricted from working across state and territory borders.

Beer excise freeze

Government support for the hospitality sector and alcohol producers was also announced in the Budget.

Indexation of the draught beer excise and excise equivalent customs duty rates will be paused in a measure costing about $165 million over five years.

Strengthening competition law

Small business will benefit from the government’s decision to work with the states and territories to extending unfair trading practices protections to small businesses.

Over $7 million will be provided over two years to strengthen the Australian Competition and Consumer Commission’s enforcement of the Franchising Code.

Subject to consultation, protections from unfair contract terms and unfair trading practices will be extended to all businesses regulated by the Franchising Code.

Supporting Australian businesses

Local companies will also benefit from $20 million in additional support for the Buy Australian Campaign, which encourages consumers to buy Australian-made products.

The Budget further supported local businesses with $16 million in funding for a new Australia-India Trade and Investment Accelerator Fund.

Additional ATO tax compliance funding

The ATO will be happy, with the 2025 Budget providing $999 million over the next four years to extend and expand its tax compliance activities.

This includes additional funding for the shadow economy and personal income tax compliance programs, together with $50 million from 1 July 2026 to ensure the timely payment of tax and unpaid super liabilities by businesses and wealthy groups.

Information in this article has been sourced from the Budget Speech 2025-26 and Federal Budget Support documents.  


It is important to note that the policies outlined in this article are yet to be passed as legislation and therefore may be subject to change. 

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RBA Announcement – April 2025

At its latest meeting, the Reserve Bank Board announced it was keeping the cash rate on hold at 4.10 per cent.

Please click here to view the Statement by Michele Bullock, Governor: Monetary Policy Decision.

With the official rate change, we’re watching closely what the banks do with their rates, as some of Australia’s biggest lenders may make changes to their rates.

You will be notified directly by your bank if and when they change their interest rate.

Please get in touch if you would like to discuss recent rate movements or if you would like to review your finance options.

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