Two separate sets of changes

The reform package below responds to the Shield and First Guardian collapses and is designed to strengthen protections for super fund members, reduce the risk of fraud and misconduct, and improve transparency across the superannuation and financial advice sectors. It is a set of proposals. Important detail is still to be released, and none of it is law yet.

The LRBA changes are a different matter. They took effect on 10 August 2026 and are already operating. New LRBAs are now restricted to property that qualifies as Business Real Property (BRP). Existing LRBAs over residential or other non-BRP property are grandfathered and can continue to be maintained and refinanced.

What are the proposed SMSF reforms?

1. Greater ATO oversight of rollovers

The ATO is expected to receive new powers to stop or pause rollovers into newly established SMSFs where there are concerns about fraud, financial abuse, misconduct or potential member harm.

The aim is to provide an additional safeguard before retirement savings leave an existing super fund.

2. Mandatory trustee education

New SMSF trustees will need to complete mandatory education and a knowledge test before their SMSF can be registered.

The intention is to ensure trustees understand the responsibilities involved before taking control of their superannuation. The Government has not yet confirmed how the education program or knowledge test will operate.

3. More clearly identifiable bank accounts

SMSFs would be required to have uniquely identifiable bank accounts to help reduce fraud risk and make it easier to distinguish fund assets from personal or business assets.

Further detail will be needed to determine how different this requirement will be from current SMSF banking practices and whether it will apply differently to new and existing funds.

4. Stronger investment strategy requirements

New SMSFs are expected to require a written investment strategy from the outset, while the Government is also considering ways to improve the quality of SMSF investment strategies more broadly.

For trustees, this reinforces the importance of having an investment strategy that reflects the fund’s investments, risk, liquidity requirements and members’ circumstances, rather than treating it simply as a compliance document.

5. Greater transparency around advice and fees

New SMSFs would need to disclose to the ATO any financial adviser involved in establishing the fund.

Annual SMSF financial statements will also include information about financial advice fees paid during the year. The measure is intended to provide greater transparency around the advice members receive and the associated costs.

6. Higher SMSF supervisory levy

The annual SMSF supervisory levy would increase from $259 to $295.

The levy will also be collected when a new SMSF is established rather than later in the fund’s life. The Government says the additional funding will support the ATO’s work to protect members from scams, fraud and financial abuse.

7. SMSFs to contribute to the CSLR

SMSFs would become part of the funding arrangements for the Compensation Scheme of Last Resort (CSLR) when a special levy is imposed.

The Government has indicated that an individual SMSF is expected to contribute no more than $20 per levy period, so the direct cost to individual funds is expected to be relatively modest.

What’s already in force: the LRBA changes

Unlike the reforms above, the LRBA changes are not a proposal. From 10 August 2026, new SMSF borrowing arrangements are restricted to property that qualifies as Business Real Property.

Existing LRBAs over residential or other non-BRP property are grandfathered. They can continue to be maintained and refinanced under the existing arrangement, but the door is closed on setting up new non-BRP LRBAs.

If you’re considering an SMSF borrowing arrangement, this is the rule that applies today, not the reform package above. Read more on the LRBA changes here.

What does this mean for existing SMSFs?

Many of the more significant procedural changes in the proposed reform package are concentrated around establishing new SMSFs.

Existing trustees may still be affected by changes to investment strategy expectations, advice fee reporting, the higher supervisory levy and CSLR funding. For trustees already maintaining sound governance and administration practices, the proposed reforms appear relatively manageable based on the information released so far.

The LRBA changes are more immediately relevant if you’re planning new borrowing. If your fund already holds a non-BRP property under an LRBA, nothing changes for you today.

What should SMSF trustees do now?

There’s no need to make changes based solely on the reform announcement. Much of the detail is still to be developed, particularly around trustee education, rollover controls, bank account requirements and investment strategies.

For existing trustees, the focus remains on meeting current obligations: keeping accurate records, reviewing your investment strategy, and ensuring the fund is properly administered.

If you’re considering establishing an SMSF, or planning a new borrowing arrangement, the two things to keep separate are what’s still a proposal and what’s already the rule. Reviewing your position as further detail is released may help identify any areas worth addressing early.