Greens Back Labor's Super Tax Reform: What It Means for High-Balance Members
The political logjam around Australia’s most significant superannuation tax reform in years has broken. On 9 March 2026, the Australian Greens confirmed they would support Labor’s Division 296 legislation, clearing the path for the Bill to pass the Senate.
For the roughly 80,000 Australians with super balances above $3 million, this is a significant development. For millions of low-income workers, there’s an upside too.
What the deal includes
The core legislation remains the same: an additional 15% tax on super earnings attributable to balances above $3 million, effective 1 July 2026. Combined with the existing 15% tax on super earnings, the effective rate on earnings above the threshold becomes 30%.
But the Greens extracted concessions at the other end of the income scale:
- LISTO increase: The low-income superannuation tax offset rises from $500 to $810
- Higher eligibility threshold: The income cap for LISTO eligibility increases from $37,000 to $45,000
- Start date: These LISTO improvements kick in from 1 July 2027
This means around six million low-income Australians will receive a larger government top-up to their super, helping offset the 15% contributions tax that disproportionately affects lower earners.
What high-balance members should do now
With passage looking near-certain, procrastination is no longer an option. If your total super balance across all funds is approaching or exceeding $3 million, consider these steps:
1. Get a clear picture of your total balance
Remember, the $3 million threshold counts everything: accumulation accounts, pension accounts, defined benefit interests, and balances across multiple funds. Log into MyGov or contact your fund to confirm your total superannuation balance.
2. Review your investment strategy
The Division 296 tax applies to earnings, including unrealised capital gains. If you hold growth assets with significant unrealised gains in super, the tax will apply to those paper gains even if you haven’t sold. This changes the calculus on asset allocation for some members.
3. Consider contribution strategies
With the concessional cap increasing to $32,500 and the non-concessional cap to $130,000 from 1 July 2026, there’s more room to contribute. But for those near the $3 million mark, additional contributions could push you over the threshold. Run the numbers with your adviser.
4. Explore withdrawal timing
For members in pension phase with balances just above $3 million, strategic withdrawals could bring your balance below the threshold. This needs careful modelling against your retirement income needs.
5. Talk to your adviser or accountant
This isn’t a DIY situation. The interaction between Division 296, contribution caps, transfer balance caps (increasing to $2.1 million), and your personal tax position creates complexity that requires professional advice.
The bigger picture
This reform marks a philosophical shift in how Australia taxes superannuation. The system has long been criticised for providing the largest tax benefits to those who need them least. The combination of higher taxes on large balances and better support for low-income earners is an attempt to rebalance that.
Whether you see it as overdue reform or an attack on retirement savings, the practical reality is the same: it’s almost certainly happening, and you need to plan for it.
Need help navigating these changes?
A qualified financial adviser or accountant can model how Division 296 affects your specific situation and help you optimise your super strategy before 1 July 2026.
Frequently Asked Questions
What did the Greens negotiate in the super tax deal?
The Greens secured an increase to the low-income superannuation tax offset (LISTO) from $500 to $810, and raised the eligibility threshold from $37,000 to $45,000 income, starting 1 July 2027.
Is the Division 296 super tax now guaranteed to pass?
With Greens support, the legislation is very likely to pass the Senate. However, it still needs to complete the parliamentary process and could face minor amendments.
When does the new super tax start?
The Division 296 tax on earnings from super balances above $3 million is proposed to commence 1 July 2026. The LISTO improvements start 1 July 2027.
Who benefits from the LISTO increase?
Low-income earners with taxable income up to $45,000 (up from $37,000) will receive a government contribution of up to $810 into their super, offsetting the 15% tax on super contributions.
