There’s been a lot of noise — and a fair few scams — about what’s changing from 1 July.
Let’s cut through the clutter and focus on the facts, so you know whether these superannuation changes apply to you and whether you need to take action.
First things first — what’s NOT happening?
There’s no special one-off bonus for Age Pension recipients. If you’ve heard otherwise, it’s a scam. Some dodgy links are doing the rounds suggesting you need to click to claim an ‘extra’ payment — don’t.
If there were genuine changes to the Age Pension, rest assured we’d be the first to update you with the correct details and how to access them.
So, what IS changing?
From 1 July, there’s a new tax targeting individuals with total superannuation balances over $3 million. It’s caused quite a stir, with concerns around its impact on super savings, estate planning, and future generations.
At Retirement Essentials, our job is to give you the facts — not to tell you what to think.
Here’s what you need to know:
The Basics
Right now, earnings on superannuation savings in accumulation phase are taxed at up to 15%.
The proposed change introduces an extra 15% tax — but only on the proportion of earnings linked to balances above $3 million. The first $3 million? Still taxed at the current 15% rate.
A key point to note: the new tax will apply to unrealised gains too. So even if your investments increase in value without you selling them, you could be taxed on the paper gains if your balance exceeds $3 million.
The good news? Unrealised losses can be carried forward and offset against future gains.
If you’re getting close to this threshold, now is a good time to review your asset mix and run some numbers on what this could mean for you.
Who’s Likely to Be Affected?
It’s estimated that around 80,000 people — less than 1% of super account holders — will be impacted initially. However, the $3 million cap isn’t indexed to inflation. Over time, more people are expected to cross this threshold as the real value of $3 million erodes. If indexation at, say, 2.5% per year were applied, the cap would sit closer to $5 million in 20 years.
As it stands, though, it will remain at $3 million — not moving with inflation or wage growth.
Is This Law Yet?
Not quite. The legislation is due to be reintroduced to Parliament after it reconvenes in late July. While the Government has a strong majority in the House of Representatives, they’ll need the Greens or crossbenchers’ support in the Senate. There’s still a chance the legislation could be amended — including the cap amount or the lack of indexation.
What Should You Do Now?
If your balance is under $3 million, you’re likely unaffected for now. But if you’re nearing or above that mark, it’s worth considering how the changes might impact you. Any moves you make should form part of your broader retirement and investment strategy — and with sums
of this size, getting professional advice is essential.
Super Just Got More Complicated
Even if these changes don’t affect you yet, managing super balances just became more complex. Different tax rates at different thresholds mean more calculations to stay on top of. If you’re finding the rules around super, private investments, or government entitlements
tricky to navigate, don’t stress — expert help is available.