The Government recently announced that it is making a number of practical changes to the design and implementation of its policy to better target superannuation concessions.
Editor: The previously announced measure regarding these changes involved effectively
imposing, from the 2026 income year onwards, an additional tax of 15% on a percentage of
“superannuation earnings” for individuals with superannuation balances above $3 million.
The Treasurer stated that the Government’s changes “take two years of feedback into account
while still maintaining the main objectives of our policy.”
First, a new second threshold will be introduced to better target super concessions on
the superannuation earnings of large balances above $10 million, with earnings above that
threshold taxed at an additional 10%.
Secondly, the Government will index the large balance thresholds of $3 million and $10
million, apply these changes to realised earnings and push back the start date by one year
“to consult on final details and prepare legislation.”
These changes mean that, from 1 July 2026:
- The total concessional tax rate applied to earnings on superannuation balances between $3 million and $10 million will be 30%;
- The total concessional tax rate applied to earnings on superannuation balances over $10 million will be 40%;
- Both the $3 million and $10 million super balance thresholds will be indexed to maintain relativity with the Transfer Balance Cap.
As part of these changes, the Government will also:
- adjust the earnings calculation so the concessional tax rates on large balances only apply to future realised earnings and not to unrealised gains; and
- apply commensurate treatment to defined benefit interests to ensure equivalent impacts, with Treasury to consult on implementation details.
Editor: The Government also announced that it would boost the low-income superannuation
tax offset (‘LISTO’), increasing it by $310 to $810, and raise the LISTO eligibility threshold from
$37,000 to $45,000 from 1 July 2027.
The Government said that it will introduce legislation to implement these changes as soon as
possible in 2026. Further consultation will be undertaken with the superannuation industry
and other relevant stakeholders to settle implementation.
Editor: We recently emailed our members in relation to the above changes to the $3 million
superannuation cap. We will continue to monitor Treasury’s consultation process and keep
members informed as draft legislation is released.
Ref: Treasury website, Media Release, 13 October 2025
Please contact Wiselink Accountants if you require further information
