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The professional body has said the Division 296 tax will have unfair tax implications for surviving spouses receiving an inheritance.
Div 296 to impose ‘widow’s tax’ on women in later life, warns CA ANZ CEO
30 May 2025
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7 minute read
CA ANZ has renewed its calls for the government to scrap the Division 296 tax, which is expected to be passed by parliament this year.
This will see earnings on super balances, including unrealised gains, that are more than $3 million, taxed at an additional 15 per cent.
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In a recent opinion piece, CA ANZ chief executive Ainslie van Onselen said there had been considerable discussion about how the tax was not just an issue for the wealthy.
"Taxing unrealised gains in super funds could see funding for the tech and start-up sector dry up, and force farmers to sell their tractors to pay tax on an income they are yet to receive," van Onselen said.
The Division 296 bill is also likely to impact women, she said.
"This Bill will further disadvantage women who are already on the back foot when it comes to superannuation, which is why I am calling it a ‘widow’s tax’," she said.
Van Onselen noted that data from the Workplace Gender Equality Agency's Women's Economic Security in Retirement shows that women at retirement age have accrued on average 50 per cent less in superannuation than men.
This is because women are more likely to have broken work patterns as they are more likely to step away from work to care for children and often other relatives, she explained.
Statistically, women also outlive men by an average of four years, based on data from the Australian Institute of Health and Welfare, she added.
"AIHW data also shows that women on average also live without disability or infirmity longer than men," she said.
Van Onselen said this also means that women are statistically more likely to be hit with this tax through inheritance with little regard to the superannuation break that has been applied throughout their earlier life when they stepped away from work due to caring responsibilities.
She acknowledged that while this example refers to a traditional heteronormative case study, the superannuation tax could have similar implications for surviving partners in same-sex marriages and relationships, regardless of gender.
"We are concerned this flawed policy will hurt many Australians while raising very little net revenue when all costs are considered. All pain, little gain," she said.
"That’s why we are calling on the government to scrap the ‘widow tax’ and start a conversation about more sensible and long-term tax reform."
The professional body wants the government to commit to a tax reform roadmap that examines the whole system and corrects the over-reliance on personal income tax, along with other matters.
"The Albanese Government has a special opportunity to use its second term of government for bold, visionary change. It shouldn’t be squandered by piecemeal tax policies which hurt everyday Australians," van Onselen said.
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