On 19 December 2025, the Albanese Government published, as part of its Better Targeted Super Concessions policy, the Treasury Laws Amendment (Better Targeted Superannuation Concessions) Bill 2025 and the Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2025. Together these Bills reduce the tax concessions for people with total super balances over $3 million by imposing new taxes under a new Division 296 of the Income Tax Assessment Act 1997.

Summary

Division 296 tax is imposed at a rate of:

  • 15 per cent on a percentage of earnings equal to the percentage of superannuation balances that exceed the large superannuation threshold ($3 million) for an income year.
  • 10 per cent on a percentage of earnings equal to the percentage of superannuation balances that exceed the very large superannuation threshold ($10 million) for an income year.

Special rules for working out Division 296 tax apply to:

  • Individuals with defined benefit interests.
  • State higher level office holders with superannuation interests in constitutionally protected funds.
  • Commonwealth justices and judges in respect of defined benefit interests in a superannuation fund established under the Judges’ Pensions Act 1968.
  • Territory Supreme Court judges in respect of defined benefit interests in their judicial pension scheme.

The amount of Division 296 tax is assessed by the Commissioner and is generally due and payable within 84 days of the Commissioner giving the notice of assessment. For defined benefit interests, Division 296 tax is generally deferred for payment until 21 days after the first benefit is paid from the interest. Individuals can have amounts released from certain superannuation interests to facilitate payment of this tax.

LISTO

The Albanese Government is also boosting the superannuation savings of more than a million low‑income workers through changes to the Low‑Income Superannuation Tax Offset (LISTO) that ensure they receive a fairer tax concession on their superannuation contributions. The LISTO eligibility threshold will be increased from $37,000 to $45,000 to align with the lowest income tax threshold (after the tax-free threshold). The maximum LISTO amount will be increased from $500 to $810, reflecting the superannuation guarantee rate of 12 per cent. Changes to the LISTO will commence on 1 July 2027 and apply from the 2027-28 income year onward.

Next steps

The Government welcomes feedback from stakeholders on the draft legislation and explanatory materials by 16 January 2026.