Proposed Superannuation Changes 2025/2026

The following changes have been proposed by government but have not yet been legislated.

Superannuation Tax Changes from 1 July 2026: New Rules for Balances Over $3 Million

The Australian Government has proposed new super tax rules from 1 July 2026, to be applied to individuals with large super balances above $3 million.

Note: This measure is part of a government proposal and has not yet been legislated and there may be changes made to the announced proposal.

What’s changing?

Earnings on balances over $3 million will be taxed at 30%
Earnings on balances over $10 million will be taxed at 40%
Applies only to realised earnings (e.g. dividends, interest, capital gains on sold assets)
Unrealised gains (paper increases in asset values) are excluded
Thresholds will be indexed to inflation

Who will be affected?

About 90,000 people with high super balances
If your total super balance is under $3 million, this change won’t apply to you and the current 15% super tax rate will continue to apply.

Why the change?

The aim is to better target super tax concessions and ensure the system remains fair and sustainable as balances grow. The Government argues that the super system’s primary purpose is to subsidise and promote retirement incomes rather than be utilised as a tax effective investment vehicle.

LISTO changes announced: Increased support for low-income earners

The Australian Government has announced significant changes to the Low Income Superannuation Tax Offset (LISTO), aimed at providing greater financial support to low-income earners. These changes are set to take effect from 1 July 2027. Note: This measure is part of a government proposal and has not yet been legislated.

Key changes to LISTO

Eligibility threshold increased: The income threshold for LISTO eligibility will rise from $37,000 to $45,000, allowing more low-income earners to benefit.
Maximum offset increased: The maximum LISTO payment will increase from $500 to $810 per year, providing greater financial support.
Expanded eligibility: Approximately 750,000 additional individuals, particularly women and young people, will become eligible for LISTO under the new thresholds.

Why do these changes matter?

These adjustments address concerns that low-income earners were unfairly taxed more on their superannuation contributions compared to their income tax. By increasing the LISTO, the government aims to ensure a fairer superannuation system and improve retirement outcomes for low-income Australians. The LISTO payment is automatically applied to an individuals superannuation account through a payment by the Government.

When does it start?

Effective date: 1 July 2027
Legislation status: The proposed changes are not yet legislated. The government plans to introduce legislation in the first half of 2026.

Payday super starting from 1 July 2026: super to be paid with every pay

From 1 July 2026, employers will be required to pay superannuation at the same time as salary and wages, rather than quarterly. This new system, known as payday super, is part of the government’s plan to reduce unpaid super and improve retirement outcomes.

Note: This measure is part of a government proposal and has not yet been legislated.

What’s changing?

Super will be paid by employers at each pay cycle, not once a quarter
Employees should able to track payments more easily
The ATO will be better positioned to enforce unpaid super
More frequent payments mean more frequent compounding, leading to higher balances over time

Why it matters?

Unpaid super is a major issue, with around $5 billion lost each year. More than 4 million Australians currently receiving quarterly super contributions are expected to benefit from the shift to payday payments.

Proposed changes

How might your super be changing?

If you’d like more information about how these changes might affect you, talk to your fund.

Thank you for your enquiry

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