Big Superannuation Announcements!
Hey friends,
Hope everyone is having a great week!
Treasurer Jim Chalmers recently unveiled a revised package of super reforms earlier this week, so let’s unpack the key changes that were announced, and I’ll also share my thoughts on them too!
1. Two-tier tax on large super balances
It was announced that there would be two new taxes implemented based on an individual’s superannuation balance.
Earnings on balances $3 million – $10 million → taxed at 30%
Earnings on balances above $10 million → taxed at 40%
This replaces the earlier single-threshold proposal of 30% tax for balances above $3M, but more importantly, these taxes are only on realised gains and will no longer include unrealised gains!
It seems like common sense has prevailed here. I can definitely get on board with these changes as it now make the system fairer and more sustainable.
I’m all for increasing taxes on larger superannuation balances, as superannuation was never meant to be a tax haven but rather a vehicle to fund your own retirement.
2. Thresholds will now be indexed
Both the $3 million and $10 million cut-offs will rise with inflation to avoid “bracket creep”.
Once again, common sense has prevailed! Previously, the proposed changes weren’t indexed to inflation, and it meant that someone who started working today in their 20s would inevitably be impacted by these new taxes later on in life.
3. No tax on unrealised capital gains
Probably the most controversial element from the first draft is now gone. Tax will now apply only to realised gains, simplifying reporting and avoiding cash-flow headaches for those who hold illiquid assets, like commercial property and real estate.
4. Bigger boost for low-income earners
The Low-Income Super Tax Offset (LISTO) maximum rises from $500 → $810. And the income threshold lifts from $37k → $45k.
This is a great change and boost for low-income earners or those who work part-time around Australia. The proposed changes will mean that roughly 14 times more Australians will benefit from this initiative.
6. Timeline
Implementation of these reforms will be pushed back one year → July 2026, allowing extra consultation and legislative time.
🧩 Other Superannuation Initiatives
Alongside these tax reforms, the government also confirmed the broader super changes already legislated or under consideration:
Super on Paid Parental Leave, commencing in 2026.
Payday Super, requiring employers to make super contributions on each payday rather than quarterly from July 2026.
Both of these changes are welcome changes that will benefit all Australians!
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