Superannuation: more relevant than ever

A range of superannuation changes that came into effect on 1 July 2026, are reinforcing the role of super as one of the most tax-effective investment structures available.

For many investors, it’s not simply that super remains attractive but that the rules continue to change. Understanding these changes can help ensure your strategy takes advantage of available opportunities while staying on track with your financial goals.

A changing tax environment

Outside of super, tighter rules around the use of discretionary trusts and closer scrutiny of income distributions have reduced some traditional tax planning flexibility. Combined with the ongoing treatment of capital gains, this has made tax outcomes in non-super structures less predictable for some investors.i In contrast, superannuation continues to provide favourable tax treatment. This is a key reason why super is becoming increasingly important in long-term financial planning.

Payday Super – boost your retirement savings

One of the more practical changes is the introduction of Payday Super, which requires employers to pay super contributions at the same time as wages rather than quarterly.ii While this is primarily an administrative shift, it can have a real impact on individuals’ super balance. More frequent contributions mean compounding begins earlier. Over time, this could lead to improved retirement outcomes.

Higher contribution caps create more opportunities

From 1 July 2026, the concessional superannuation contribution cap (including employer contributions and salary sacrifice) increased to $32,500 from $30,000 in the 2025-2026 financial year.

Non-concessional caps have also increased, from $120,000 in 2025-2026 to $130,000 in the 2026-2027 financial year, enabling larger after-tax contributions. This can be particularly relevant for individuals who have accumulated savings outside super and wish to transfer funds into a more tax-advantaged environment.iii

Carry-forward and bring-forward rules

Two existing rules continue to offer significant opportunities when used effectively.iv

The carry-forward rule allows those with a total super balance below $500,000 on 30 June in the previous financial year to use unused concessional cap amounts from previous years. This can be especially beneficial for those with irregular income patterns, such as business owners or individuals returning to work after a break.

The bring-forward rule allows you to make several years’ worth of non-concessional contributions in one year, subject to eligibility criteria. This can be particularly useful when receiving an inheritance, selling an asset or restructuring investments.

Parental leave contributions

Another important development is the extension of super contributions to government-funded parental leave, introduced last year. It recognises the long-term impact that time out of the workforce can have on retirement savings, particularly for women.v While the financial impact may appear modest in the short term, over time the effect of compounding can be meaningful.

Division 296 tax

One of the more widely discussed measures is the Division 296 tax, which applies an additional tax on earnings associated with super balances above $3 million.vi

While this affects a relatively small proportion of investors, it represents an important shift in the superannuation landscape. The measure is designed to target very large balances, with the objective of limiting the extent of tax concessions at higher levels of wealth.

Transfer Balance Cap increase to $2.1 million

The increase in the Transfer Balance Cap to $2.1 million is another positive development, particularly for those approaching or entering retirement.

This cap determines how much can be transferred into the tax-free retirement phase. An increase allows more capital to benefit from a zero per cent tax rate on earnings, enhancing after-tax income in retirement.

Bringing it all together

Superannuation continues to offer a compelling tax environment, particularly when compared with other investment strategies that are facing increased complexity and scrutiny.

Contribution caps, along with carry forward and bring forward rules, provide multiple pathways to build super balances over time. Changes such as Payday Super and parental leave contributions highlight the benefits of regular, ongoing investment into super and the power of compounding. While new measures such as Division 296 introduce additional considerations, they do not diminish the overall value of super for most investors.

Please get in touch if you’d like to discuss any of these superannuation options.

i Capital Gains Tax and Discretionary Trusts Reform | Treasury.gov.au

ii Payday Super | Fair Work Ombudsman

iii Contributions caps | Australian Taxation Office

iv Carry forward and bring forward rules | ATO

v Paid Parental Leave Superannuation Contribution | ATO vi Better Targeted Super Concessions is law | ATO

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Investing for the next generation

For many, the goal of investing is about creating wealth for a comfortable financial future, as well as a legacy that supports your children and grandchildren for decades to come.

But one of the greatest risks to that legacy can be the challenge of dealing with sudden wealth. When adult children inherit large sums or significant assets without preparation, sometimes the result is family tension, poor decisions or erosion of wealth.

While precise figures vary, research and industry experience consistently show that many families struggle to preserve wealth beyond the second and third generations, largely due to behavioural and governance challenges rather than investment performance.

Building financial literacy

Financial capability is developed over years of exposure, education, and experience.

The Australian Securities and Investments Commission (ASIC) MoneySmart program emphasises that financial literacy is a core life skill, not simply a technical ability.

While an inheritance may be some years off, parents who are expecting to pass on some form of an inheritance, should begin involving their children in financial discussions where appropriate. This might include reviewing investment portfolios together, explaining the complexities of how superannuation works or discussing the rationale behind major financial decisions. Understanding how risk is associated with investing, and ongoing tax obligations is also essential to create the whole picture.

Practical experience is just as important as theory. Allowing adult children to manage a portion of investments, under guidance, can build confidence and accountability. This phased approach reduces the risk of overwhelm later, when financial responsibility increases significantly.

Gifting or loaning?

Another important consideration when supporting the next generation is whether to provide financial assistance as a gift or a loan. The decision has both ethical and practical implications.

Gifting can provide immediate support without the burden of repayment, allowing children to purchase a home, invest or establish a business. But unequal gifting among siblings may create perceptions of favouritism, even if the intention is fair. Clear communication and documentation of the reasoning behind decisions is essential.

Loaning, on the other hand, can maintain a sense of responsibility and fairness.

Loans structured with clear terms can encourage financial discipline and avoid creating dependency. Families often formalise the arrangements with written agreements that set expectations for repayments and interest. There are also taxation and legal considerations.

The Australian Taxation Office may assess certain arrangements differently depending on whether funds are genuinely gifted or loaned. Professional advice ensures that intentions are reflected correctly. Ultimately, the choice between gifting and loaning may come down to the financial maturity of the recipient and your estate plan.

Preparing the next generation beyond money

Financial preparation alone is not enough. Inheriting wealth also involves emotional and behavioural readiness.

Open conversations about wealth, values and expectations are important. This includes explaining the purpose of wealth, whether it is to provide security, support philanthropy or create opportunities for future generations.

Governance structures, such as family meetings, investment committees or advisory boards can also help heirs understand their roles and responsibilities and encourage collaboration.

Philanthropy is another powerful tool for preparing heirs. Involving children in charitable giving decisions can instil a sense of social responsibility. It reinforces the idea that wealth is not solely for personal use, but also a resource to benefit the broader community.

Managing the transition

Gradual transition strategies can ease the adjustment for both parents and children.

This might involve progressively transferring control of assets. For example, adult children may first participate in decision-making, then take on increasing responsibility for managing investments over time. Trust structures are often used for staged distributions, allowing flexibility and protection.

Regular reviews are equally important. As family circumstances change, so too should the plan. Marriage, divorce, business ventures or health issues can all affect how wealth should be managed and transferred.

A legacy of capability

Successful intergenerational wealth transfer is not measured by the size of the inheritance but by the preparedness of those who receive it. Financial literacy, decision-making and open communication are the foundations of lasting wealth. By investing time in educating and including the next generation, families can reduce the risks associated with sudden wealth and create a legacy that endures.

If you’d like to discuss how to prepare your family for a successful wealth transition, we’re here to help.

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Smart tax and super planning before EOFY

Tax time is just around the corner, so now is the time to make sure you’re prepared for 30 June.

Each year, the ATO highlights its areas of focus. Taking a few minutes now to review these can help you avoid issues when lodging your return.

Work-related deductions under scrutiny

This year, the ATO is focusing on work-related deductions and income that’s not declared on tax returns.

If you are claiming work-related expenses, ensure they meet the ATO’s three golden rules:i

  1. The expense must be directly related to earning your income
  2. You must not have been reimbursed
  3. You must have records to support your claim, such as receipts or a logbook

For working from home expenses, you can use either the actual cost method or the fixed rate method.

Instant asset write-off

The instant asset write-off remains an important tax concession for Australian small businesses in the 2025–2026 financial year. Eligible businesses with an aggregated turnover of less than $10 million can immediately deduct the business portion of eligible assets costing less than $20,000, instead of depreciating them over several years. The asset must be first used or installed ready for use between 1 July 2025 and 30 June 2026.ii

Don’t overlook income

The ATO is also paying close attention to undeclared income. This includes:iii

  • Cash payments
  • Interest income
  • Rental income
  • Earnings from crypto assets

For those with a side hustle, check whether it may be considered a business. All business income, regardless of amount, is assessable and must be declared.iv

If you intend to claim deductions for business expenses related to your side hustle, ensure they are directly connected to earning that income and are supported by receipts.

Time for a portfolio review

Recent market volatility makes this a good time to review your investment strategy.

Checking your capital gains or losses before 30 June allows you to take action where appropriate.

For example, you may consider realising capital losses to offset gains from assets such as shares, property or crypto.

Tax timing strategies

If you have regular deductible expenses, such as investment loan interest or annual costs, it may be useful for some to prepaying them before 30 June to claim a deduction for this financial year.

You may also consider the timing of income expected before 30 June. Deferring income until after the end of the financial year may help reduce your tax liability.

Tax rates are also changing for lower income earners. From 1 July 2026, the rate for income between $18,201 and $45,000 will reduce from 16 per cent to 15 per cent, with a further reduction to 14 per cent the following year.

Super contribution strategies

The end of the financial year is an ideal time to review your super contributions.

If you plan to contribute before 30 June, check when your employer will make their contributions. The introduction of Payday Super means some employers are contributing earlier, which may affect your contribution caps.

For SMSF members, make sure that:

  • All contributions are received by the fund’s bank account by 30 June
  • Minimum pension payments are made
  • Asset valuations are up to date
  • Fund records are current

Be alert for tax time misinformation

The ATO is warning taxpayers to be cautious about the growing wave of tax “tips”, shortcuts and refund claims circulating online.

Content from social media, “finfluencers” and even artificial intelligence tools can sound convincing, but it is not always accurate or relevant to Australian tax law. Acting on this kind of advice can lead to incorrect claims, delays in processing returns and, in some cases, penalties.

Larger refunds, easy deductions or so-called “loopholes” should always be checked against trusted sources.

Ultimately, you are responsible for the accuracy of everything included in your tax return, regardless of where the advice came from.

Taking a few extra minutes to verify information before you lodge can help you avoid costly mistakes and keep your return on the right side of the rules.

Please get in touch if you need any help preparing for the end of the financial year.

Source: https://www.ato.gov.au

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Selling the family home and navigating aged care costs

The transition of a parent or relative into residential aged care can be one of the most emotionally and financially challenging moments a family will face.

Beyond the personal upheaval, a number of issues need to be dealt with quickly including how to fund the Refundable Accommodation Deposit (RAD), how to cover daily care fees and what to do with the family home.

On the plus side, selling the home can suddenly transform someone’s financial position from “cash poor” to “cash rich”. But for those relying on the Age Pension, the sudden spike in assets has major implications for pension eligibility, aged care means testing and ongoing fees.

Understanding how the rules work can make all the difference in turning a potentially damaging financial outcome into a sustainable aged care funding solution.

Making the move

Usually, a person’s home is exempt from the Age Pension assets test but once it’s sold, the cash is then assessed as an asset and that may reduce the pension payments.

There are a number of exemptions to this rule. For example, if you leave your home to enter aged care due to illness, your home may be exempted from the assets test for up to two years. And, it won’t be counted as an asset if your partner is still living there.i

In addition to the Age Pension means test, the types of fees and how much you pay for an aged care home bed also depend on an assessment of your income and assets. The aged care means test considers both your income and assets to determine how much government subsidy you receive and what you will pay in care fees.

Options for managing the proceeds of a sale

Once the family home is sold, the sudden boost in cash can feel overwhelming. But, with good advice, the funds can be used to improve cashflow, reduce ongoing costs and preserve as much of the pension and aged care subsidy as possible.

Here are some of the options:

1. Paying the refundable accommodation deposit (RAD)

Paying the full RAD means you don’t pay the daily accommodation fees (DAP), which can be hundreds of dollars per day. But, be aware, that a refundable lump sum is counted as your asset in the aged care means assessment, even if it is paid by a family member. This means that paying a lump sum can affect your fees. On the other hand, a RAD may improve Age pension eligibility for some people. ii

2. Paying a part RAD and part DAP

It doesn’t have to be all or nothing. You could pay some of the accommodation deposit and then pay a reduced daily fee. The advantage is that you have access to the cash for living and medical expenses.

3. Making a downsizer super contribution

For those aged over 55, up to $300,000 can be contributed to super after selling the family home, which may be a more tax-effective environment. There is no maximum age on making a downsizer contribution despite normal super rules preventing most voluntary contributions after age 75.

Your super balance is also assessed as part of the means test for both the Age Pension and aged care fees.

4. Renting the home instead of selling

This option might suit those who want to keep the property in the family. While the rental income will be counted as part of the income test, depending on how you pay for your aged care accommodation, there may be some exemptions from means testing.

In a nutshell, selling the family home can affect both the Age Pension and aged care means testing, increasing costs and reducing entitlements.

The key is in using the new funds wisely. With careful planning, families can navigate this transition in a way that protects income, manages fees and ensures the person entering aged care has the resources they need.

With so many complex and time‑sensitive decisions to make during an already emotional period, getting the right advice can be critical in helping families make informed choices and avoid costly mistakes. Please give us a call if you’d like more information.

i Real estate assets – Age Pension | Services Australia

ii Understanding aged care home accommodation costs | My Aged Care

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Is your trust structure still right for you?

Family trusts remain one of the most flexible and tax-effective structures used by Australian families and small business owners. But wealth grows, family situations evolve, tax rules shift and businesses expand over time – and all these changes can affect whether your existing trust deed is still fit for purpose.

So, as we approach the end of financial year, it’s a good time to review your trust arrangements.i

There are many reasons for taking another look at your trust, including:

  • The trust deed no longer reflects your financial or family priorities.
  • Distributions are not as tax-effective as they once were
  • Your list of beneficiaries hasn’t been updated with new partners, children or grandchildren
  • The trustee may not be appropriate now because of age or illness
  • Administration may now be a burden and outweigh the original advantages

There are also some triggers that mean you may need to consider a more complex, or even a completely different structure, and these can include the following:

A significant increase in investment or business income

A basic trust may struggle to distribute income efficiently if there are fewer adult beneficiaries; the beneficiaries are already in high marginal tax brackets; or family circumstances have changed (children have grown and are now earning higher salaries).

You are accumulating assets across multiple entities

If investment portfolios, rental properties or business activities have expanded, a more sophisticated structure may provide better asset protection, simpler management or clearer succession pathways.

The trust is being used as part of a broader family wealth strategy

As intergenerational wealth becomes a priority, a traditional discretionary trust might not offer enough flexibility in some areas such as estate planning, managing capital gains or managing assets for vulnerable beneficiaries.

You are preparing for the sale of a business or major asset

A review is critical if a trust is to be involved in the sale of shares, business assets or property. Different structures can affect access to CGT concessions, including the small business CGT concessions.

Next steps

The good news is there are several ways to adjust the trust structure without starting from scratch, including:

Amending the trust deed –  Many deeds allow for amendments to bring the document up to date such as modernising distribution provisions, clarifying beneficiary classes or updating powers given to trustees.

Changing the trustee –  If the trustee is no longer appropriate, a change can be made to appoint someone more suitable or a corporate trustee to improve governance and reduce risk.

Updating beneficiaries or redefine classes –  Some trust deeds allow for updating the list of beneficiaries or adjusting who can receive distributions. This can help ensure the trust continues to serve the family as it is today, not as it was decades ago.

Winding up the trust –  If the trust is no longer useful, it may be best to wind it up to reduce costs and complexity, although capital gains tax and stamp duty implications will need to be carefully managed.

Changing the structure – Depending on your goals, alternatives such as a company structure or a self-managed super fund may be more suitable.

Consider hybrid or testamentary arrangements – Where estate planning is involved, testamentary trusts or hybrid structures might offer more control or flexibility, particularly if supporting future generations is your priority.

Why you might add a corporate beneficiary

Another option is to use a corporate beneficiary (often called a “bucket company”), which is commonly used to cap tax on trust distributions at the corporate tax rate.ii

Here are signs it may be time to introduce a corporate beneficiary:

  • Your trust’s beneficiaries are approaching higher marginal tax brackets
  • You need an entity to hold retained earnings
  • You want more flexibility in managing year-to-year tax outcomes
  • You are planning business or investment growth

As your financial affairs become more sophisticated, having a corporate beneficiary can expand the range of future planning options including reinvestment strategies, gearing, or structures such as corporate groups or family investment companies.

 Whether your wealth is growing, your family is changing or your business is expanding, taking time each year to review your trust structure ensures you remain aligned with your objectives and compliant with tax law.

A review now can save tax, reduce risk and set your family up for greater flexibility in the years to come and we are here to assist.

i Trusts | ATO ii Can a Company Be a Trust Beneficiary in Australia? | Sprintlaw

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What are the SMSF investment restrictions?

About SMSF investment restrictions

SMSFs are complex, here we have outlined some of the restrictions to help you before you make any decisions on self-managed super fund (SMSF) investment. You must ensure you understand any restrictions on SMSF investments to avoid any penalties.

There are some exceptions, however, generally your SMSF must not:

  • lend or provide financial assistance to members or related parties
  • acquire assets from members or related parties
  • use collectables and personal use assets in a way that provides a present-day benefit
  • allow trust distributions owing to the SMSF to remain unpaid
  • breach the in-house asset rules
  • borrow money.

No one associated with your SMSF should get a present-day benefit from its investments.

If you don’t comply with the investment restrictions, the ATO may take a range of actions, including:

  • imposing penalties
  • making the fund non-complying
  • disqualifying you as a trustee
  • prosecution of trustees.

Who are related parties?

A related party of your SMSF includes:

  • all members of your fund
  • associates of fund members, which include
    • the relatives of each member
    • the business partners of each member
    • any spouse or child of those business partners
    • any company or trust the member or their associates control or influence
  • standard employer-sponsors (employers who contribute to your SMSF for the benefit of a member under an arrangement between the employer and a trustee of your fund)
  • associates of standard employer-sponsors, which include
    • business partners and companies or trusts the employer controls (either alone or with their other associates)
    • companies and trusts that control the employer
    • relatives of an employer sponsor.

A relative is any of the following:

  • a parent, grandparent, brother, sister, uncle, aunt, nephew, niece, lineal descendant or adopted child of the member or their spouse
  • a spouse of the member and any individual specified above.

Loans and financial assistance

Your SMSF can’t provide loans, or direct or indirect financial assistance, to a member or a member’s relative. For example, you can’t use your SMSF as guarantor for a loan for a member or a member’s relative.

Loans must:

  • be in the best interests of the members
  • comply with the SMSF’s investment strategy
  • be conducted on a commercial arm’s length basis.

If you run a business through your SMSF, you also can’t overpay a member or relative of a member for their services. If you employ a member or a relative of a member, their salary or wage must not be higher than the standard salary for that type of role.

Acquiring assets

Your SMSF can’t acquire an asset from a related party unless the price reflects the market value and is:

  • a listed security (for example, shares, units or bonds listed on an approved stock exchange)
  • business real property
  • an asset specifically excluded from being an in-house asset.

You must also ensure the market value of your fund’s in-house assets doesn’t exceed 5% of the total market value of your fund’s assets.

Crypto assets and private company shares are not listed securities and can’t be acquired from a related party.

If an asset is not acquired or sold at arm’s length, all or part of any income from the transaction may be non-arm’s length income and taxed at the highest marginal rate.

To help you comply with the requirements, use the valuation guidelines for self-managed super funds.

Collectables and personal use assets

Where your fund invests in collectables and personal use assets, this must be for genuine retirement purposes, not to provide any present-day benefit.

Assets such as artwork, boats, jewellery, vintage cars and wine are described as collectables and personal use assets.

Natural diamonds (including pink diamonds), when held in loose form, are not considered collectable or personal use assets. As such, they do not have specific storage and insurance requirements. However, for these types of assets it is recommended trustees:

  • hold adequate insurance
  • consider storage arrangements.

‘Diamonds held in loose form’ means they cannot be mounted, integrated into or used as an item for adornment or other purposes which would be inconsistent with the holding of the diamond in loose form for investment purposes.

Collectables and personal use assets can’t be:

  • used by or leased to a related party (if leased to an unrelated party it must be at arm’s length)
  • stored or displayed in the private residence of a related party (this includes all parts of the land the residence is situated on and all buildings on that land, such as garages or sheds)
  • displayed in any other premises owned by a related party (they can be stored there provided they’re not visible to clients and employees).

You must keep a written record of the reason for deciding where to store the assets.

Collectables and personal use assets must be insured. You should consider the availability and cost of insurance before investing in them. Items must be insured within 7 days of the fund acquiring them and the fund must be listed as the owner and beneficiary of the policy.

These assets can be sold to related parties provided the sale is at market value as determined by a qualified, independent valuer.

Unpaid trust distributions

If your SMSF is entitled to a distribution from a related trust but you allow it to remain unpaid, you may contravene the:

  • in-house asset rules
  • arm’s length rule
  • sole purpose test.

In-house assets

You are restricted from having in-house assets that comprise more than 5% of the market value of the SMSF’s total assets.

An in-house asset is any of the following:

  • a loan to a related party of your fund
  • an investment in a related party of your fund
  • an asset of your fund that is leased to a related party, such as business equipment or machinery.

Any lease must be made on an arm’s length basis and reflect the market value.

If at the end of the financial year your SMSF’s in-house assets exceed 5%, you must prepare a written plan to reduce in-house assets to 5% or below. This plan must be prepared before the end of the following financial year. Trustees must also ensure the plan is carried out.

There are some exceptions to in-house assets, including:

  • business real property that is leased between your fund and a related party of your fund
  • some investments in related non-geared trusts or companies.

The in-house asset rules for assets owned before 11 August 1999 were defined differently. If your SMSF owns assets that were acquired before this date, you should review your fund’s investments to ensure you are complying with the current rules.

Decrease in asset values due to COVID-19

Some SMSFs may have experienced a decrease in asset values due to the economic impact of COVID-19. If this resulted in a breach of the in-house asset rules as at 30 June 2020, or the in-house assets being more than 5% of the total assets, the fund was required to prepare and implement a rectification plan by 30 June 2021.

Business real property

Business real property generally means land and buildings used wholly and exclusively in a business. It’s an exception to the in-house asset and related party acquisition rules.

If business real property contains a dwelling for private or domestic purposes such as a farm, it can still meet the requirements of being used wholly and exclusively in a business if:

  • any dwelling used for private or domestic purposes is in an area of land no more than 2 hectares, and
  • the main use of the whole property is not for domestic or private purposes.

Running a business in an SMSF

If running a business through an SMSF, it must be:

  • allowed under the trust deed
  • operated for the sole purpose of providing retirement benefits for fund members.

The rules governing SMSFs prohibit or limit some activities available to other businesses, such as entering into credit arrangements or having overdrafts.

You should get professional advice before running a business through your SMSF.

It is important to ensure the sole purpose test is not breached. Issues that attract our attention include those where:

  • the trustee employs a family member (we look at things like the stated rationale for employing the family member and the salary or wages paid)
  • the ‘business’ is an activity commonly performed as a hobby or pastime
  • the business run by the fund has links to associated trading entities
  • there are indications the fund’s business assets are available for the private use and benefit of the trustee or related parties.

Contact us if you have any questions regarding your SMSF, we’re here to help. Source: ato.gov.au April 2025
Reproduced with the permission of the Australian Tax Office. This article was originally published on https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/self-managed-super-funds-smsf/smsf-investing/restrictions-on-smsf-investments/what-are-the-smsf-investment-restrictions.
Important: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person. 
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RBA Announcement – February 2026

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

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

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

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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Prepare for an SMSF shake-up in 2026

Self-managed superannuation fund (SMSF) trustees always have a lot on their to-do lists but the first few months of 2026 are likely to be busier than usual.

Topping the list is preparing for the introduction of Payday Super and the Better Targeted Superannuation Concessions on 1 July 2026.

Payday Super is a change to when you make your employees’ Superannuation Guarantee (SG) payment. From 1 July 2026, the SG must be paid to an employee’s super fund on payday and be received by the fund within seven business days. If you are taking on new employees or paying to a new super fund, these funds must be received within 20 business days.i

Employers are considered to have made a contribution when the fund receives it, not when they pay it, so SMSFs need to have the necessary systems set up and in place from 1 July.

Who’s affected?

The ATO has warned SMSF trustees that Payday Super should not be ignored.

If you are a business owner and pay contributions for yourself or your employees into an SMSF, the fund will be receiving more contributions and there will be increased administration requirements to deal with payment timing and record keeping.

The strict timing rules also come with tougher penalties and any delay may incur a Super Guarantee Charge, which is not tax deductible.

New clearing house partners

SMSFs also need to be prepared for closure of the ATO’s Small Business Superannuation Clearing House (SBSCH) from 1 July 2026.ii

Employers currently using the SBSCH should take immediate action to find an alternative. You could check your accounting software and payroll packages, which may already include super functions, or look at the options offered by commercial clearing houses or other software providers.

Failing to prepare for the SBSCH closure means you may risk a fine.

SuperStream updates

Payday Super’s 1 July start date will also usher in changes to contributions messaging within the SuperStream system, the electronic standardised format employers must use to make super contributions.iii

Changes include clearer error messaging and are designed to reduce employee contributions being rejected by the receiving super fund.

SMSF trustees need to ensure their internal systems are updated and ready to cope with the SuperStream changes, as timely and correct contribution payments are a key goal of the new rules.

According to ATO deputy commissioner Emma  Rosenzweig, one of the most common SMSF errors in this area is where the Electronic Service Address (ESA) was never activated with the provider or is no longer active.

This error means the employer receives a SuperStream error message but does not receive the matching refunded super contribution.

Prepare for earlier contributions

The ATO is encouraging employers not to wait until 1 July to start making Payday Super contributions to help improve the transition.

SMSFs should also ensure they are able to receive contributions via the New Payments Platform (NPP), as employers who currently use direct debit are being encouraged to move to faster payment methods such as EFT and NPP.

With contributions flowing in more regularly – rather than quarterly – it may also be timely to reassess your SMSF’s investment strategy and portfolio allocation to ensure it remains suitable for the shift in contribution flows.

High balance tax changes

Another thing to be mindful of is from 1 July 2026, SMSFs will need to be prepared for the commencement of the government’s much delayed Better Targeted Superannuation Concessions.iv

These new rules are intended to reduce tax concessions for individuals with a Total Super Balance (TSB) above $3 million.

Under the new rules, people with higher super account balances will face a higher 30 per cent concessional tax rate on the proportion of earnings corresponding to their TSB between $3 million and $10 million.

With a higher TBC in place for 2025-26, SMSFs should consider the implications of the new tax regime prior to making any pre-30 June contributions and potentially breaching the indexed thresholds in future financial years.

If you need help preparing your SMSF for the upcoming changes, contact our office today.

i Spotlight on… Payday Super | Australian Taxation Office

ii The Small Business Superannuation Clearing House is closing | Australian Taxation Office

iii SuperStream for employers | Australian Taxation Office

iv Better targeted superannuation concessions | Australian Taxation Office

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Payday Super — What Employers Need to Do Before 1 July 2026 (Short Summary)

From 1 July 2026, employers must pay superannuation guarantee (SG) contributions at the same time as wages—this is the new Payday Super system.

This replaces the old rule allowing SG payments 28 days after each quarter.

Under Payday Super, contributions must be paid and received by the employee’s super fund within seven business days. Because employers rely on payroll software and payment systems, they may be held responsible for delays outside their control—an issue many industry bodies have criticised.

Key Things Employers Should Prepare For

1. Update and test payroll systems early

DSPs (software providers) are still updating systems because legislation only passed in November 2025.

No transition period exists—everything must work from 1 July 2026.

Current processing times for many systems exceed 7 days, so employers should urgently test payroll and super processes now.

Expect delays, errors, and increased workload as contributions jump from 150 million to 500 million per year.

2. Plan for cash‑flow changes

SG must be paid far sooner, which may affect business cash flow.

Late payments, even by one day, trigger the Superannuation Guarantee Charge (SGC), along with penalties, interest and potential reputational damage.

Some employers may consider moving paydays to Friday to gain extra non‑business days, but many cannot make this change easily.

3. Final quarter of FY2026

Employers should pay April–June 2026 SG before 30 June 2026.

Paying after 30 June but before 28 July (the old deadline) may cause excess concessional contributions for employees in 2026–27.

The Government may introduce transitional measures, but nothing is confirmed.

4. Start paying super with wages now

Employers are encouraged to begin early to identify issues, update processes, and train staff well before the official start date.

If you are an employer, you must be prepared prior to 1st of July 2026.

Please contact your accountant should you need assistance.

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Life cover

A sudden death can place financial stress on those who depend on you. If this happens, life cover can help them pay the bills and other living expenses.

What is life cover

Life cover is also called ‘term life insurance’ or ‘death cover’. It pays a lump sum amount of money when you die. The money goes to the people you nominate as beneficiaries on the policy. If you haven’t named a beneficiary, the super trustee or your estate decides where the money goes.

Life cover may also come with terminal illness cover. This pays a lump sum if you’re diagnosed with a terminal illness with a limited life expectancy.

Important: Accidental death insurance is different from life cover. It will only pay out if you die from an accident. It will not provide cover if you die from an illness, disease or suicide. This type of cover often has a lot of exclusions.

To understand what’s covered under a policy and the exclusions, read the product disclosure statement (PDS).

Decide if you need life cover

If you have a partner or dependents, life insurance can help repay debt and cover living costs if you die.

If you don’t have a partner, or people who depend on you financially, you may not need life cover. But consider getting trauma insurance, income protection insurance or total and permanent disability (TPD) insurance in case you get sick or injured.

How much life cover you might need

To decide how much life cover to get, consider how much money you or your family would:

  • need — to pay the mortgage, credit cards and any other debts, child care, school fees and ongoing living expenses
  • receive — from super, savings, the sale of any investments, your paid leave balance, and support from your extended family

The difference between these is the amount of cover you should get.

If you need help deciding if you need life cover, and how much, speak to us.

How to buy life cover

Check if you already hold life insurance through super. Most super funds offer default life cover that’s cheaper than buying it directly. You can increase your level of cover through your super fund if you need to.

You can also buy life cover from:

  • a financial adviser
  • an insurance broker
  • an insurance company

Life cover can be bought on its own or packaged with trauma, TPD or income protection insurance. If it’s packaged, your life cover may be reduced by any amount paid on other claims in the package. Check the PDS or ask your insurer.

Life cover premiums

You can generally choose to pay for life cover with either:

  • variable age-stepped premiums (previously known as ‘stepped premiums’) — are based on your age and recalculated at each policy renewal. Generally, this means that the cost of your cover will increase as you get older because there is a higher chance of making a claim as you age.
  • variable premiums (previously known as ‘level premiums’)— charge a higher premium at the start of the policy, but changes to the cost aren’t based on your age, so increases generally happen more slowly over time.

Your choice of variable age-stepped or variable premiums has an impact on how much your premiums will cost now and in the future. 

Regardless of which way you choose to pay for your cover, premiums are not guaranteed and may change annually. Speak to your insurer or read the PDS for more information. 

Compare life cover

Once you know how much life cover you need, shop around and compare:

  • benefits and policy features
  • exclusions
  • waiting periods before you can claim
  • limits on cover
  • the cost of the premiums — now and in the future

A cheaper policy may have more exclusions, or it may become more expensive in the future. You can find information about the policy on the insurer’s website or in the product disclosure statement (PDS). 

What you need to tell your insurer

An insurer will ask you questions when you apply for or change your insurance. These questions may be about your: 

  • age
  • job
  • medical history
  • family history, such as a history of disease
  • lifestyle (for example, if you’re a smoker)
  • high-risk sports or hobbies (such as skydiving)

If an insurer doesn’t ask for your medical history, it may mean that the policy has more exclusions or narrower policy definitions.

The information you provide will help the insurer to decide:

  • if they should insure you
  • how much your premiums will be
  • terms and conditions for your policy

It is important that you answer the questions honestly. Providing misleading or incomplete answers could lead an insurer to cancel or vary your cover, or decline a claim you make.

Making a life cover claim

If someone close to you dies and you need to make a claim, or if you need to make a terminal illness claim, see how to make a life insurance claim. 

Source:
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/how-life-insurance-works/life-cover
Important note: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.  Past performance is not a reliable guide to future returns.
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