“This results in their superannuation funds not applying the appropriate 15 per cent tax to their contribution. As the contribution has been deducted from the individual’s income, no tax is paid on it at all.”

The government plans to provide the ATO with additional funding to enable it to develop a new compliance model, and to undertake additional compliance and debt collection activities.

“The ATO will modify income tax returns to alert individuals to the NOI requirements with a tick box to confirm they have complied. The ATO will also provide guidance to individuals on how to comply if they have not yet done so,” the budget papers said.

This will ensure that any deductible contributions are appropriately taxed by superannuation funds and enable the ATO to deny deductions to individuals who do not comply with the NOI requirements.

NowInfinity technical director Julie Dolan said the notice of intent process has always been quite loose with individuals only required to fill in a form prior to a certain date to show your notice of intent.

“So now what they're doing, is they're tightening up that process, and they're going to integrate a tick box process into the tax return,” Ms Dolan explained.

“They’re also putting in more money into educating individuals to make sure that they understand what that's all about.”