New valuation rules for defined benefits
Division 296 tax significantly changes how defined benefit superannuation interests are valued and taxed. It matters mostly for higher‑income members and pensioners whose notional super balances approach or exceed the new $3 million (and $10 million) thresholds.
A central implication is that defined benefit interests will be re‑valued annually under prescribed methods, typically based on family‑law style actuarial factors, rather than the old static “pension × 16” approach or withdrawal values.
These new rules apply to both defined benefit pensions in payment and defined benefit interests still accruing, and are designed to give the ATO a more realistic, standardised total superannuation balance (TSB) figure for each member.
While the ATO has yet to finalise the methodology, indicative estimates are available via our Family Law valuation page here with the option to order a formal valuation.