“However, the proportion of those earnings that are over $3 million and subject to the tax is based on the member's total super balance at the end of the year with no adjustments for contributions or withdrawals,” he said.

“And then we simply tax that proportion at 15 per cent.

“However, in relation to actually paying the tax, we thought it would work similarly to paying Div 293 tax, but you're going to get 84 days to pay it instead of 21 days.”

Mr Sanderson said there will also be a lower general interest charge rate applied when payment of Div 296 is overdue.

“They're trying not to penalize people who don't have the liquidity to pay the tax,” he added.

“You will also still be able to elect to release from one or more super interests, and a 60-day period will apply there. There will be debt deferral arrangements similar to Div 293, that will apply for that tax relating to accruing defined benefit interests.”

Mr Sanderson said much of the arguments concerning the proposed measure centre around what is counted as withdrawals and contributions during the year for the purposes of calculating the actual earnings.

“If we're looking at the difference between total super balance at the beginning of the year, and at the end of the year, if we make a contribution, or we pull out a withdrawal, obviously that distorts our earning calculations,” he said.

“So, we either have to add those amounts back in for withdrawals or strip them back out if they're a contribution.”

He said lump sum withdrawals will be treated as such but there will also be other amounts counting as withdrawals under the proposal.

“These will include pension payments and contribution splitting and family law splitting amounts paid from a member’s super interest across to the spouse or previous spouse.”

Additionally, amounts paid out as release authorities with slight adjustments for all first-time Super Saver schemes to exclude that earnings amount.

However, withdrawals won't include rollovers or payments under an income protection policy where the member is suffering a temporary disability.

Other amounts that won't be treated as withdrawals include those paid under the Unclaimed Money Act, or those paid from a foreign super fund.

Mr Sanderson continued that contributions will include all regular types of contributions.

“It's been confirmed that it will only be 85 per cent of the amount, in the case of concessional contributions, to recognize that the tax has been paid within the fund,” he said. “In addition, contributions will include contribution splits and family law splits received.”

Death, total permanent disability or terminal illness proceeds received into the fund and allocated to the member's account will also be included as contributions as well as amounts allocated from reserves that form part of a member's concessional contributions.

“Transfers coming in from a foreign super fund will be a contribution, and also the value of a death benefit income stream where a member starts to receive that during the year,” he said.

“I think what we've seen here in the draft exposure Bill, that it's confirming that some of those events that skew the calculation of a member's earnings, and where there was previously uncertainty will be taken into account.”