Where are we now? Pending and recent superannuation changes

From 1 July 2027, the LISTO income threshold will increase from the current threshold of $37,000 to $45,000 to be more in line with the top of the second income tax bracket.

The LISTO rules are designed to ensure that lower-income earners do not pay more tax on their super contributions than they would have paid if the same amount had been received as take-home pay.

The maximum LISTO payment will also increase to $810. This higher payment accounts for recent increases in the SG rate.

These changes will ensure that the LISTO payments achieve the policy intention of providing low-income workers with a tax concession on their superannuation contributions to support income in retirement.

Division 296 earnings tax on $3 million+ balances

Division 296 refers to the new 15% tax on superannuation fund earnings for individuals with a total super balance (TSB) above $3 million, and a further 10% tax on earnings generated on member balances above $10 million.

In the 2026–27 financial year, the tax will be applied based on the member’s TSB at the end of the financial year (30 June 2027). In future financial years, the higher of the member’s TSB on the previous 30 June and the member’s current year-end TSB will be used.

From 1 July 2027 onwards, withdrawing super during the financial year will not necessarily prevent Division 296 tax from applying for that year, as balances both immediately prior to the start of the financial year and the end of the financial year are taken into account.

The threshold applies to individuals, so couples can still have up to $6 million in super and not be liable for additional tax. Individual application also means the total value of a self-managed super fund (SMSF) may be above $3 million, but if no members have an individual TSB above the threshold, then no Division 296 tax applies.

This measure commenced on 1 July 2026.

SMSF borrowing changes

Major changes to the SMSF borrowing rules were announced by the government in June 2026, which resulted in the banning of new limited recourse borrowing arrangements (LRBAs) used by SMSFs to acquire residential property.

Existing borrowing arrangements are not affected by these changes, and LRBAs are still allowed to be used where the asset being acquired is business real property.

Details around the key changes include:

• From 10 August 2026, SMSF trustees are no longer allowed to use an LRBA to acquire property unless it’s business real property
• Existing LRBAs entered into before 10 August 2026 remain unaffected by the changes, provided they complied with the superannuation laws in force when they were established
• SMSF trustees are still able to refinance pre-10 August 2026 LRBAs but should seek advice on the appropriate process to follow.

SMSF reform measures 2026

In August 2026, the government announced a number of new consumer protection reform measures aimed at the SMSF sector. The measures include the ability for the ATO to pause rollovers into newly established SMSFs while investigating suspected fraud, financial abuse, misconduct or other potential harm.

The proposals also introduce the requirement for prospective SMSF trustees to complete an approved education course before they can establish an SMSF.

Other measures worth noting include:

• The need to operate uniquely identifiable bank accounts, separate from any other personal or business account
• The requirement for newly established SMSFs to have a written investment strategy in place at the time of establishment. The government will also consult on how to improve the quality of SMSF strategies
• The need to disclose information about advisers and other professionals who were involved in the establishment of new SMSFs and arrangements where ongoing advice-fee deductions apply
• The ATO will provide a clearer comparison of SMSF investment returns with those of APRA-regulated funds, particularly for lower-balance funds.

To cover the increased regulatory costs in implementing and enforcing these SMSF measures, there will be an increase in the ATO supervisory levy, with a proposed increase from $259 a year to $295 a year.

Changes to the SMSF residency rules

The May 2021 proposals to relax the residency requirements for SMSFs have not yet been finalised.

The proposed changes include:

• Extending the central management and control safe harbour test from two years to five years
• Removing the active member test altogether.

These measures would allow SMSF members to continue contributing to their super fund while temporarily working or studying overseas, ensuring a more level playing field with large APRA-regulated funds.

There has been no further progress made to legislate this reform.