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Major superannuation reforms and expanded low-income super concessions are now law, following Royal Assent on 13 March 2026.
The Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 and the related Superannuation (Building a Stronger and Fairer Super System) Imposition Bill 2026 will take effect from 1 July 2026. Together, the measures introduce Division 296, imposing additional tax on superannuation earnings linked to high balances, and expand the Low Income Superannuation Tax Offset (LISTO).
Division 296 tax
Division 296 imposes an additional tax on superannuation earnings attributable to high total superannuation balances (TSB):
- TSB of $3 million to $10 million: an additional 15% tax (bringing the total tax rate on affected earnings to 30%).
- TSB above $10m: a further 10% (bringing the total to 40%).
Division 296 tax applies from the 2026-27 income year, with liability for that first year determined by reference to the individual’s TSB at 30 June 2027. Both thresholds will be indexed annually to CPI. The regime applies across APRA-regulated funds, SMSFs and exempt public sector schemes, including defined benefit schemes.
TSB changes
From 1 July 2026, each superannuation interest will have its own TSB value, determined using a prescribed valuation method or withdrawal benefit value, depending on the interest. An individual’s TSB will be the sum of all such values. This replaces the previous reliance on transfer balance account values and aligns the TSB definition with annual valuation requirements.
For Division 296 purposes only, limited recourse borrowing arrangement amounts are excluded from the TSB, ensuring the tax applies to net superannuation assets. Usual TSB rules otherwise remain unchanged.
LISTO expanded
From 1 July 2027, the maximum LISTO will increase to $810, and eligibility will extend to individuals with incomes of up to $45,000, aligned with the lowest marginal tax rate threshold. A new statutory formula will determine the maximum offset amount, with no indexation to the LISTO cap.
Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026
Superannuation (Building a Stronger and Fairer Super System) Imposition Bill 2026
