Key Superannuation Measures from the 2025-26 Federal Budget
On Tuesday, 25 March 2025, Treasurer Jim Chalmers delivered the 2025-26 Federal Budget, marking his fourth in office. For superannuation, it was largely a non-event, with the main measure being additional funding to extend the ATO’s Tax Integrity Program. This extension is expected to raise an extra $31 million over five years (starting from 2024-25) by targeting unpaid superannuation from medium and large businesses, as well as wealthy groups.
Proposed Div 296 Regime – Uncertainty Remains
While no major new superannuation measures were announced, the superannuation industry is already grappling with the ongoing uncertainty surrounding the proposed Div 296 regime for account balances exceeding $3 million, set to take effect from 1 July 2025.
Under the proposed Div 296 of the ITAA 1997, individuals with an adjusted total superannuation balance above $3 million at the end of each financial year will face an additional 15% tax on a portion of earnings. This portion will be proportional to the amount by which their superannuation balance exceeds $3 million (the threshold is not indexed). The new tax will be imposed on earnings from 2025-26, and it will be in addition to any tax that super funds already pay on earnings in accumulation. Consequently, earnings on balances over $3 million will generally face a combined tax rate of 30%.
However, the legislation for Div 296 has not yet passed through Parliament. It is expected that the bills will lapse once the Prime Minister calls the federal election, unless they are passed beforehand. Therefore, the fate of the proposed Div 296 regime may be contingent on the outcome of the May election. If the ALP remains in government after the election, it is likely that the bills will be reintroduced, though the 1 July 2025 start date may be delayed.
Super Guarantee: No Change to 12% Increase for 2025-26
The Budget did not announce any changes to the timing of the next and final increase in the Super Guarantee (SG) rate. The SG rate is set to rise from 11.5% to 12% on 1 July 2025, marking the culmination of a series of annual increases since the rate stood at 9.5% in 2020-21. This 12% rate will be the final destination under current legislation.
SG for High-Income Earners
With the increase in the SG rate to 12% from 1 July 2025, the opt-out income threshold for high-income earners will also decrease to $250,000 (down from $260,870). High-income earners with multiple employers can opt out of receiving SG contributions from an employer to avoid unintentionally breaching the concessional contributions cap, which is set at $30,000 for both 2024-25 and 2025-26.
Payday Super
The “Payday Super” reforms, which were previously announced, will commence on 1 July 2026. These reforms will amend the SG legislation to align the payment of SG contributions with an employee’s payday, rather than the current quarterly minimum payment schedule. The government released draft legislation for these reforms on 14 March 2025, but no further changes were announced in the Federal Budget.
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Disclaimer: The information on this page is for general information purposes only and is not specific to any particular person or situation. There are many factors that may affect your particular circumstances. We advise that you contact Mathews Tax Lawyers before making any decisions.