“It’s simply too complicated,” BGL managing director Ron Lesh said.

“Indexing the $1.6 million cap to $1.7 million is not the problem — it’s the partial indexation where a person has already commenced a pension that is crazy.

“There are two real problems with partial indexation. Potentially, every person can now have a different total balance cap, and the access to ATO total balance cap data is not readily available.

“This makes these changes a nightmare for SMSF advisers.”

Mr Lesh said the ATO and the Treasury have known for more than two years that this would be a problem but have done nothing about it.

“BGL and many others have been asking for API access to ATO total balance cap data, but our requests have been ignored — it’s simply not good enough,” he said.

Mr Lesh has urged the government to resolve the issue quickly.

“The simplest [way] is to remove partial indexation and increase the total balance cap for everyone to $1.7 million. This removes the complexity and is fairer than some of the other solutions,” Mr Lesh said.

“Why should the date a person commences a pension determine how much that pension should be? Clearly, this is unfair.

“BGL needs to implement these changes in our Simple Fund 360 SMSF admin software by 1 July 2021. Implementing partial indexation without access to ATO total balance cap data is going to result in many errors.

“It would be really nice if the government took into account the practical implementation issues of the legislation and made changes to help accountants who have already borne the brunt of the work around JobKeeper of the past 12 months.”