The Federal Government has just announced major changes to its proposal to increase taxes on “large” superannuation balances.
This announcement marks a significant shift from the earlier policy, which proposed an additional 15% tax on super balances over $3 million — a move that attracted criticism for unfairly taxing unrealised investment gains and for failing to include indexation on the threshold.

A Win for Superannuation Members

In welcome news, the Government has dropped the plan to tax unrealised gains and has confirmed that indexation will now apply to the thresholds.

The Treasurer stated that the Government had “worked through the issues and found a better way” — and for once, that may ring true.

What’s Now Proposed

If legislated, the new measures will introduce a tiered tax system for superannuation balances:

Importantly, both the $3 million and $10 million thresholds will be indexed, aligning with the Transfer Balance Cap.The new rates will apply to future realised earnings only, with Treasury to consult on how best to calculate and attribute those earnings to individual fund members.

Why This Matters for Estate Planning

Superannuation often represents one of the largest assets in a person’s estate. These changes, once legislated, could influence:

  • How and when you draw down super in retirement;
  • The structure of your super funds (for example, SMSF vs. industry funds); and
  • Tax efficiency when planning how superannuation benefits pass to the next generation.

For those with substantial balances, especially over the new thresholds, it may be prudent to review your estate plan and consider strategies to manage super tax exposure while maintaining flexibility and intergenerational wealth transfer goals.

What Happens Next

The Government has not yet released draft legislation, but aims for the measures to commence from 1 July 2026.

If you’re unsure how these changes might impact your superannuation or estate planning strategy, now is a good time to seek advice.

At Rouse Lawyers, our estate planning team works closely with clients and their advisers to ensure their superannuation and wealth structures remain tax-effective and aligned with their long-term goals.