Chartered Accountants Australia and New Zealand together with CPA Australia welcome the opportunity to comment on the draft regulations made under the Building a Stronger and Fairer Super System Act 2026.

We consider that several legislative amendments are required to ensure the regime operates as intended. In particular, we believe that income distributions from life insurance statutory funds should be included at the super fund level, given the significant scale of investments held through these structures. We also note that APRA‑regulated funds frequently amend lodged annual returns, often with immaterial impacts at the member level. We suggest that the law should be amended so that APRA-regulated superannuation funds should not have to re-report BTSC income for each impacted member unless the assessable income of the fund has been adjusted by at least 10 per cent higher or lower than the amount previously reported. 

We propose a number of regulatory changes, including:

• Clarifying drafting and cross‑referencing in proposed Regulation 296‑55.01.
• Enhancing Regulation to better reflect the operation of the “fair and reasonable” principle, particularly for funds investing through pooled superannuation trusts.
• Providing substantially more guidance in the Explanatory Statement on how income should be allocated at a member level, including how negative amounts interact with the requirement that total Division 296 income not be negative.
• Confirming that negative member‑level outcomes are permissible where appropriate and ensuring consistent treatment between APRA‑regulated funds and SMSFs.

We also raise significant administrative and equity concerns, including:

• The risk of penalties for early reporting errors, which we propose should be deferred or discounted during an initial transition period.
• The absence of clear rules for flexi‑pension income streams.
• Practical issues arising from CGT adjustments, relationship breakdowns, segregated assets in SMSFs, and deceased estates.

Finally, we support the policy intent behind the defined benefit reduction factor but recommend a formal review mechanism to manage long‑term equity and sustainability risks.

CA ANZ media releases related to this policy

• Changes to $3m super tax welcomed by peak accounting body
• "What is next the family home?" CA ANZ calls for urgent super bill review
• People should not have to borrow money to pay tax
• CA ANZ calls for superannuation tax concessions policy to be scrapped
• Proposed superannuation changes pose risk to future generations
• Superannuation policy in Australia is becoming like trying to shoot a moving target flying in circles over shifting goalposts