Division 296 Tax Changes Now Law

New legislation has passed parliament with no amendments, introducing Division 296 to reduce tax concessions for individuals with very large super balances and updating the Low-Income Superannuation Tax Offset (LISTO) to align with broader tax and super rules.

What This Means for High-Balance Super Accounts

From the 2026–27 income year, individuals with a Total Superannuation Balance (TSB) over $3 million will face reduced tax concessions:

• 15% tax on realised earnings proportionate to the amount of TSB above $3 million.

• An additional 10% tax on realised earnings for TSB exceeding $10 million.

This is designed to make the super system fairer while maintaining incentives for retirement savings.

Updates to LISTO

Starting 1 July 2027, changes to the Low-Income Superannuation Tax Offset (LISTO) will apply from the 2027–28 income year onwards:

• The income threshold for LISTO eligibility will rise from $37,000 to $45,000.

• The maximum LISTO payment will increase from $500 to $810, reflecting the recent rise in the Superannuation Guarantee rate.

• LISTO rates and thresholds will now be linked with personal income tax thresholds and the Superannuation Guarantee rate.

These updates ensure the super system is fairer and better aligned with broader tax settings while continuing to support low-income earners.