Superannuation Changes from 1 July 2025: What You Need to Know

At ICare Super, we are committed to keeping you informed about important superannuation updates that may impact your retirement planning and SMSF compliance. From 1 July 2025, several key changes to superannuation rules and thresholds come into effect. Here’s a summary of what you need to know.

Superannuation Guarantee Rate Increases to 12%
Starting 1 July, the Superannuation Guarantee (SG) rate will rise from 11.5% to 12%. This means employers are now required to contribute 12% of eligible employees’ ordinary time earnings to their superannuation fund.

What This Means for You:

• Employees will receive a higher amount in their superannuation.

• Employers must update payroll systems to reflect the new rate.

• SMSFs with related-party employees must ensure compliance with the increased SG obligation.

General Transfer Balance Cap Increases to $2.0 Million
The Transfer Balance Cap – which limits the amount of super that can be transferred into the tax-free retirement phase – will increase from $1.9 million to $2.0 million.

Why This Matters:

• More retirees can move additional funds into the pension phase, enjoying tax-free earnings on investments.

• It’s important to review your transfer balance account and pension strategies with your accountant or SMSF administrator.

Social Security Thresholds Increase by 2.4%
Various social security rates, thresholds, and limits will also rise by 2.4%, including:

• Age Pension income and asset thresholds

• Commonwealth Seniors Health Card thresholds

• Rent assistance and other support payment limits

These changes may impact your eligibility for government support, especially if your superannuation is approaching the upper limits.

New Division 296 Tax from 2025–26 (Proposed)
Under proposed Division 296 legislation, from the 2025–26 financial year, individuals with a Total Superannuation Balance (TSB) over $3 million will face an additional 15% tax on a portion of estimated earnings.

Key Points:

• This tax applies personally, not at the fund level.

• The 15% additional tax will apply to the proportion of earnings related to the balance above $3 million.

• Earnings will be calculated using a formula – not actual cash flow – and may include unrealised gains.

What You Should Do:

• Review your current and projected superannuation balances.

• Consider whether your SMSF or retail fund may exceed the $3 million threshold.

• Seek advice early to assess possible tax implications and strategic options.

Stay Informed and Compliant with ICare Super
At ICare Super, we stay ahead of regulatory changes so you don’t have to. Whether you’re managing your own Self-Managed Super Fund (SMSF) or planning for retirement, our team is here to help you navigate the evolving superannuation landscape with clarity and confidence.

Need help understanding how these changes affect you?
Contact our team today for personalised advice.