Super Changes Explained: What’s Now Locked In – and Why Early Review Matters

There has been a great deal of discussion about recent changes to superannuation tax settings, particularly for Australians with larger balances. For regional business owners, primary producers, and those using super as part of along-term asset strategy, it can be difficult to cut through headlines and understand what is actually legislated, and what is still speculation.

The important point is this: the changes are now law. The Federal Government has passed legislation aimed at “better targeting” superannuation tax concessions, and these rules will take effect from 1 July 2026.

Understanding how these changes work and how they may apply to your circumstances is an important step toward planning with clarity and confidence.

‍What has changed?

From 1July 2026, individuals with total superannuation balances above $3 million will be subject to additional tax on superannuation earnings attributable to the portion of their balance above that threshold. These changes sit within legislation referred to as Division 296.

Key points:

‍• The $3 million threshold applies per individual, not per fund
• Your total superannuation balance across all funds is taken into account
• The additional tax does not apply to your entire balance
• It applies only to earnings attributable to the amount above the relevant threshold
• Division 296 is a personal tax, assessed to you (and may generally be paid from super)

A two-tiered approach for larger balances

Balances between $3 million and $10 million attract an additional 15% tax on attributable earnings. Balances above $10 million attract a higher additional rate, reducing concessions further.

When combined with existing fund-level tax, earnings above $3 million may be taxed at up to 30%, and earnings above $10 million at up to 40%.

Importantly, this does not cap how much you can hold in superannuation. Instead, it reduces the level of tax concession available on earnings above these thresholds.

Both the $3 million and $10 million thresholds are indexed over time, helping ensure the measure remains targeted to larger balances.

‍What counts as earnings?

One of the most significant changes from earlier proposals is that the final legislation taxes realised earnings only.

This includes:

• Investment income such as rent, interest, dividends, and franking credits
• Realised capital gains from assets that are sold

It does not apply to unrealised capital gains, meaning assets that increase in value but are not sold are not taxed under Division 296 on that increase alone.

That said, the timing and nature of realised earnings can still create planning considerations, particularly where income is uneven, or assets are held for long periods before being sold.

Why this matters for regional clients

For many people in regional South Australia, superannuation looks very different from the typical “balanced fund” portfolio.

We often see super structures that hold:

• Farming or commercial property
• Land held for long‑term use or succession
• Business premises
• Other assets where value builds over time rather than producing steady annual income

These assets can be highly effective within a long‑term super strategy. However, the introduction of Division 296 means it is now more important to understand how and when earnings are generated, and whether sufficient liquidity is available to meet tax obligations as they arise.

This doesn’t mean these structures are no longer appropriate, but it does mean they benefit from deliberate planning.

This is not about panic – it's about perspective.

It’s important to emphasise that these changes do not mean superannuation is no longer effective. Even with the additional tax, super remains a concessionally taxed environment compared to many alternatives.

What has changed is the importance of reviewing your position earlier and more deliberately, particularly if your balance is approaching or already exceeds the relevant thresholds.

Taking time now allows you to:

• Understand how your balance may evolve over time
• Model different scenarios rather than relying on assumptions
• Identify potential cashflow or timing issues early
• Align super decisions with broader business and retirement objectives

A steady, informed approach

The opportunity here is not about reacting to headlines or making rushed changes. It’s about understanding what is now locked in and making informed decisions in a measured way.

For regional business owners especially, where super, land, and business are often closely intertwined, clarity can make a meaningful difference.

Starting the conversation early creates space to plan thoughtfully, rather than being forced to react later.

The team at Murray Nankivell are here to help you navigate these changes. Please contact your Murray Nankivell adviser or our superannuation team to discuss how Division 296 may apply to your circumstances.

Disclaimer: This is general information only. This material does not consider your personal circumstances. Professional advice should be obtained before making financial decisions.