The Financial Advice Association Australia believes changes to super tax concessions have only increased the need for financial advisers to gain access to the ATO portal to view client data.
The government announced it would make changes to Division 296 – the legislation that would reduce tax concessions for high super balances – with a consultation for the new draft legislation for Div 296 launched in the waning days of 2025. That consultation closed last Friday, 16 January.
In a submission to the consultation, the FAAA said the introduction of the transfer balance cap, total superannuation balance and imminent introduction of the superannuation tax concession changes mean direct knowledge of the range of client superannuation accounts, taxable income and superannuation contributions is needed to avoid giving incorrect advice.
“This information is readily available in the ATO portal, however financial advisers do not have access to the ATO portal, despite being recognised tax advisers,” the submission, signed by FAAA chief executive Sarah Abood said.
The association further argues that streamlined adviser access – subject to “appropriate” protections – would reduce cyber threats, inappropriate advice and administration time and costs.
The FAAA has advocated for adviser access to the ATO portal and several Financial Services and Credit Panel disciplinary hearings showed advisers could be liable for basing their recommendations off incorrect information, which portal access could mitigate.
The revised Div 296 bill has kept the original 30 per cent tax rate on earnings inside a super balance above $3 million, but the updated bill added a second threshold of 40 per cent for earnings above $10 million and both thresholds will be indexed.
Indexation of the thresholds will be consistent with the process for indexing the general transfer balance cap, which is based on the Consumer Price Index, guidance for the draft bill said.
The new bill will only tax realised gains, ending the controversial provision that saw unrealised gains taxed, which saw fierce criticism.
The FAAA was supportive of the removal of taxing unrealised gains and indexing the thresholds, but noted the timing of indexation transfer balance cap and the Div 296 thresholds may not be aligned and that they should be for simplicity reasons.
The association argued this could be achieved by defining the large superannuation balance threshold (currently $3 million) to be 1.5 times the general transfer balance cap and the very large superannuation balance threshold ($10 million) to be 5 times the general transfer balance cap.
The SMSF Association, which was among the strongest critics of the original bill, welcomed recent changes but warned that significant issues remain, arguing the draft bill still failed to find a balance between simplicity, equity and workability.
SMSF Association chief executive Peter Burgess said there were other cost-effective and less complex alternatives that should be considered by the government.
“We recognise the policy intent to reduce tax concessions for individuals with very large superannuation balances,” Burgess said.
“We also acknowledge the challenge of balancing simplicity with fairness. But right now, Treasury hasn’t got that balance right.”
The SMSF Association said that there are multiple scenarios where individuals may be liable for Div 296 tax despite not being the ultimate beneficiaries of the superannuation benefits that give rise to the tax, as well as cases where inappropriate amounts of earnings are attributed to members who fall within scope.
The association called for targeted amendments to minimise these outcomes and also proposed a simplification of the capital gains tax (CGT) adjustment provisions to reduce unnecessary complexity.
A joint submission from CPA Australia and the Institute of Public Accountants said the proposed changes to superannuation tax rules risk unfairly penalising Australians’ retirement savings by mishandling the treatment of franking credits.
The submission warned that the draft legislation would penalise super funds holding assets that generate franked dividends, even where those dividends ultimately attract little or no tax due to superannuation’s concessional tax rates.
CPA Australia superannuation lead Richard Webb said the proposed framework would lead to inequitable outcomes for superannuation funds, particularly where franking credits are excluded from the calculation of fund earnings for Div 296 purposes.
“Franking credits exist to ensure income is taxed at the shareholder’s correct tax rate. Ignoring them in the new super tax framework produces an unfair and inconsistent result,” Webb said.
“For many super funds, franking credits are effectively a refund of tax already paid. Treating those refunds as irrelevant when calculating earnings is at odds with how our tax system is designed to work.”
