Understanding the Division 296 superannuation changes
Division 296 is a change to Australia’s superannuation tax framework that introduces an additional tax on certain superannuation earnings for individuals with higher total super balances. The purpose of this page is to provide a clear, high level overview of what Division 296 is, who it may affect and why it is relevant for long term financial planning. It is intended as general information only.
What is Division 296
Division 296 introduces an additional 15 percent tax on superannuation earnings that are attributable to the portion of an individual’s total superannuation balance above $3 million. This measure does not cap how much you can hold in superannuation. It also does not change the way super is taxed for balances below the $3 million threshold. The additional tax applies only to earnings linked to the amount above that threshold.
The tax is assessed to individuals rather than to superannuation funds, although in certain circumstances it may be paid from super.
When does Division 296 apply
The legislation introducing Division 296 has passed Parliament and received Royal Assent. The measure applies from 1 July 2026.
Total superannuation balances will be tested after this start date, with the first assessments expected once balances are assessed at 30 June 2027.
Who may be affected
Division 296 is expected to apply to a relatively small number of Australians.
It may be relevant if your total superannuation balance across all funds, including any self managed superannuation funds, exceeds $3 million or is approaching that level over time. Most Australians will not be impacted by this change.
How the tax works at a high level
At a broad level, the additional tax applies to superannuation earnings that relate to the portion of a balance above $3 million.
The calculation is based on realised earnings rather than unrealised gains, and the thresholds are indexed over time. The way the tax applies can depend on individual circumstances, including how superannuation interests are structured and how balances change over time.
Why Division 296 matters for long term planning
For individuals with higher super balances, Division 296 adds an extra layer of complexity to retirement and wealth planning. Superannuation often forms part of a broader financial picture that may include personal assets, business interests and other investment structures. Changes to the tax treatment of super earnings can influence long term outcomes, funding decisions and the role super plays within an overall strategy. Understanding the framework early allows for informed conversations and forward planning well before the rules apply in practice.
Learn more
If you would like to understand more about Division 296 and how it may relate to your broader financial position, our team is available to help explain the changes and answer general questions.
Contact the Carey Group team to arrange a conversation.
Important information
The information on this page is general in nature and has been prepared without taking into account your personal objectives, financial situation or needs. It is not intended to be personal financial advice. Before making any decisions in relation to your superannuation or financial arrangements, you should consider whether this information is appropriate to your circumstances and seek professional advice.
