The Federal Government’s latest rewrite of superannuation rules has left many Australians wondering what it means for their retirement savings. Treasurer Jim Chalmers has described the overhaul as a move to make the $4 trillion super system “fairer from top to bottom.”

But for those with higher balances, these changes will introduce a new layer of tax and complexity. Here’s what’s changing, who’s affected, and what you can do to plan ahead.

What’s Changing Under Division 296

The revised design for the Division 296 tax removes two of the most controversial elements of the original proposal; taxing unrealised capital gains and freezing the 3m threshold. Both are now gone.

Instead, the Government has proposed to introduce a tiered structure for taxing earnings based on total super balances:

Up to $3 million: No Division 296 tax. Earnings continue to be taxed at 15% (standard accumulation rate)

$3 million to $10 million: An additional 15% tax on realised earnings, bringing the total to 30%

Over $10 million: An additional 25% tax on realised earnings, bringing the total to 40%

These thresholds apply across all your super accounts (both accumulation and pension phase) and will now be indexed to inflation, meaning they’ll rise over time alongside the transfer balance cap.

The proposed start date is 1 July 2026, with the first tax payable in the 2027–28 financial year.

Who Will Be Affected

If you have less than $3 million

There’s no change to your tax rate on super earnings; it remains at 15%.

If you have $3 million to $10 million

At this level, super remains highly tax-effective, but the additional 15% Division 296 tax means it’s worth reviewing your structure.

If you have over $10 million

This is where the impact becomes more significant. The effective tax rate on earnings above this threshold rises to 40%. It is important to note this rate is still lower than the top marginal rate of 47% (including Medicare levy).

Should You Act Now?

In short: not yet.

While it’s prudent to plan, the legislation is not yet final, and the details could still change before Parliament passes it.

“Understand what the measures mean, talk to your adviser,and do the modelling, but no knee-jerk reactions,” says Causbrooks CEO andFounder Darrel Causbrook.

The prudent course right now is to:

Review your total super balance and projected growth.

Identify if your spouse’s balance can be equalised.

Model potential tax outcomes under the new thresholds.

Plan ahead for July 2026, but don’t act until the legislation is final.

Confidence in Super Remains Key

Despite the media attention, superannuation remains one of the most tax-effective investment structures available to Australians. Even under Division 296, most people will still pay significantly less tax inside super than outside it.

Yes, the rules continue to evolve. But so do personal taxrates, trust laws, and company tax structures. For most investors, super will likely remain the cornerstone of long-term wealth accumulation.

How Causbrooks Can Help

At Causbrooks, we work closely with clients to help them navigate complex legislative changes with confidence. Whether you’re approaching the new thresholds or already over them, our specialists in SMSFtax can help you:

Model the impact of Division 296 on your specific circumstances.

Design tax planning strategies to balance, withdraw, or restructure super effectively.

Integrate your super planning with your broader tax and estate planning strategy.

Need clarity on how these changes affect you? ContactCausbrooks today to book a review of your super and investment structure aheadof the July 2026 changes.