In Brief

1. The Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026, introduced to Parliament on 11 February 2026, proposes a 15% additional tax on superannuation earnings attributable to balances above $3 million — with a further surcharge for balances above $10 million — subject to Senate passage.

2. The proposed measure taxes only realised earnings, not paper gains: a significant change from the original 2023 design that drew industry-wide criticism.

3. For individuals with Total Superannuation Balances above these thresholds, the bill creates material planning questions around timing, fund liquidity, and the merits of alternative international structures.

For three decades, superannuation operated on a straightforward compact: lock capital away until preservation age and pay tax at 15% on earnings. That compact remains intact for the vast majority of Australians. For those with Total Superannuation Balances (TSBs) above $3 million, the Albanese government's proposed Division 296 tax — now embedded in the Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 — would fundamentally alter the economics of holding large balances inside super. The bill was introduced to Parliament on 11 February 2026 and, as of March 2026, has not yet passed the Senate. The measure is real, its structure is confirmed, and planning decisions made now will shape outcomes in both the 2026-27 transitional year and beyond. But the critical qualifier for every analysis is this: it is still proposed law, not enacted law. The Senate remains the decisive chamber. The tiered tax structure and what the rates actually mean If enacted with a commencement date of 1 July 2026, Division 296 would operate as follows. The existing 15% fund-level tax on earnings continues unchanged for all superannuation balances. For the proportion of earnings attributable to TSB above $3 million, an additional 15% Division 296 tax applies — producing a combined rate of 30% on those earnings. For balances above $10 million, a further 10% surcharge applies, producing a combined rate of 40%. Both thresholds are indexed: the $3 million threshold in $150,000 increments and the $10 million threshold in $500,000 increments. The October 2025 revision added indexation that the original 2023 bill lacked — addressing one of the principal objections that the fixed nominal threshold would capture more members over time through superannuation balance growth alone. For context, the standard Australian corporate tax rate is 30% for companies with annual turnover above $50 million (25% below that threshold). The Division 296 framework means that earnings on super balances above $10 million will be taxed at a combined 40% — above the corporate tax rate — on capital that remains

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Disclaimer: This article is for general informational purposes only and does not constitute legal, tax, or financial advice. Readers should seek professional advice tailored to their specific circumstances. Information reflects the position as of the publication date and may be subject to change. This article addresses UAE, Australian, UK, and Canadian law where specified; different rules apply in other jurisdictions. © 2026 Alldren. All rights reserved. This article addresses Australian superannuation law. Readers should seek advice from a qualified Australian financial adviser or tax agent before making superannuation decisions.