Our ATO updates blog provides key tax updates and regulatory changes. Stay informed with the latest insights to ensure compliance and informed decision-making.
Payday Super Consultation Continues
The ATO is continuing to engage with industry and stakeholders on the Government’s Payday Super reform, proposed to commence from 1 July 2026.
Consultation updates are available on the Payday Super Working Group section of the ATO website.
Key proposed changes for Super Funds include:
- Revisions to the choice of fund rules allowing employers to show an employee’s existing stapled fund to them as part of the onboarding process if they choose. The scope of this change will not make any changes to the existing ATO stapling service.
- Contributions will need to arrive in employees’ super funds within 7 calendar days of payments with an Ordinary Time Earnings (OTE) component.
- Time to return an unallocated contribution to an employer will reduce to 3 days, down from 20.
- The SuperStream data and payment standards will be revised to allow payments made via the New Payments Platform and improve error messaging to ensure employers and intermediaries can quickly address errors.
- Enhancements to the Fund Validation Service which will support faster payments and better data through the system.
- Increased visibility of super guarantee contributions for the ATO to match employer Single Touch Payroll (STP) data and superannuation fund reporting.
The Payday Super measure is not yet law. For more detail, visit ato.gov.au/paydaysuper.
SMSF Auditor Compliance Focus for 2025
Last year, the ATO had over 32,000 new funds enter the sector. This was an increase of 21% from 2022–23. The population of SMSFs has grown to over 625,000 and now holds over $1 trillion in assets.
SMSF auditors have a critical role in maintaining the health and integrity of the sector, so it’s important you understand your obligations and where the ATO considers the biggest risks exist in 2025. Where the ATO finds that auditors are not complying with their obligations, it may refer them to the Australian Securities & Investments Commission (ASIC) for further action.
Market valuations
Approved SMSF auditors are responsible for verifying and retaining sufficient audit evidence to support the market value of assets. Where there’s insufficient evidence, you must consider modifying the Independent Auditor’s Report (IAR). You must also lodge an Auditor Contravention Report (ACR) where the reporting criteria are met.
In 2024, the ATO contacted auditors where SMSFs they audited reported unchanged values for certain assets across several income years. In 2025, the ATO will continue this program, including reviewing auditors where asset values remain the same and no ACR is lodged.
High volume auditors
In 2025, the ATO will continue its focus on auditors who audit a large number of SMSFs. This includes auditors that regularly undertake over 1,000 audits per year or who have had a rapid increase in their audit numbers in recent years. The ATO will be visiting auditors at their offices to review their audit process.
Disqualified trustees
Auditors must confirm that the trustees of the SMSF are not acting as a trustee or director of a corporate trustee while a disqualified person. In 2025, the ATO is reviewing auditors where its information indicates trustees have acted while a disqualified person and no ACR has been lodged.
High-risk auditors
The ATO collects a range of data and intelligence about the SMSF auditor population. It uses this information to identify auditors it considers high risk. The ATO will continue to conduct audits of high-risk auditors and refer them to ASIC when they have not complied with their obligations.
Auditors with low fixed-price business models continue to be a concern for the ATO. These models inherently restrict the amount of time an auditor can spend on an audit and can lead to lower-quality audits, particularly where the SMSF has more complex investments.
Independence
As an approved SMSF auditor, you’re required to comply with independence requirements as part of your professional obligations.
Following an increase of referrals to ASIC in the last financial year that included independence issues, the ATO will be focusing on auditors it considers high risk. This includes auditors:
- conducting in-house audits
- with reciprocal auditing arrangements
- that have a long association with clients and
- have a large proportion of their client base come from a single referral source.
You need to ensure you’re meeting the independence requirements set out in APES 110 Code of Ethics for Professional AccountantsExternal Link (including Independence Standards).
General transfer balance cap indexation on 1 July 2025
Indexation of the general Transfer Balance Cap (TBC) will occur on 1 July 2025. This cap will increase by $100,000 from $1.9 million to $2 million. The Defined Benefit Income Cap (DBIC) will increase to $125,000 (from $118,750) for the 2025–26 income year.
This increase has flow through impacts for individuals with a personal TBC. These individuals will be entitled to an increase of their cap if they have not previously been at, or exceeded, their cap. Their increase will be a proportion of the $100,000 and will depend on their unused cap space. Individuals starting a pension for the first time on or after 1 July 2025 will be entitled to a personal TBC of $2 million. Individuals can view their personal TBC in ATO online services through myGov.
The ATO will calculate an individual’s personal TBC based on the information reported to and processed by them. To help individuals have a clear understanding of their position, the ATO encourage funds and advisers to report all TBC events when they occur and as early as possible before 1 July 2025 indexation start date.
Indexation of the general TBC has flow through consequences for the Total Super Balance (TSB). The TSB influences an individual’s non-concessional contributions cap, non-concessional bring forward arrangement, and eligibility for spouse tax offset and co-contributions.
Source: Australian Taxation Office
