Federal Budget Update 2026-2027

Federal Budget 2026/27: Superannuation state of play

Treasurer Jim Chalmers delivered the 2026/27 Federal Budget on 12 May 2026, against a backdrop of global economic uncertainty and continued geopolitical instability.

While there were no unexpected headline changes to SMSFs, the Budget reinforces an important theme: superannuation remains one of Australia’s most tax-effective long-term investment structures, particularly for members with total superannuation balances below $3 million.

For SMSF trustees and advisers, the key superannuation measures to be mindful of are outlined below.

Division 296 tax: higher balances still in focus

From 1 July 2026, individuals with a total superannuation balance above $3 million at the end of the financial year (30 June 2027) will be subject to an additional 15% tax on earnings attributable to the portion of their balance above the $3 million threshold.

For very large balances above $10 million, a further 10% tax will apply to earnings on the portion above that threshold.

This creates a tiered tax framework for higher-balance superannuation members and reinforces the need for careful planning around contributions, pensions, asset allocation and liquidity.

Importantly, for members with balances below $3 million, superannuation continues to offer highly concessional tax treatment.

Contribution caps and key thresholds increasing

From 1 July 2026, several important contribution and superannuation thresholds are scheduled to increase:

These changes may create additional planning opportunities, particularly for members looking to make concessional or non-concessional contributions before retirement.

Advisers and trustees should consider these increased caps in the context of each member’s total superannuation balance, contribution history, age, cash flow and broader retirement strategy.

Payday Super

The Government’s Payday Super reforms will require employers to pay superannuation guarantee contributions at the same time as salary and wages, rather than quarterly.

From 1 July 2026, contributions will need to be received by the employee’s superannuation fund within seven business days of payday.

For SMSFs, this may result in more frequent contribution processing and reconciliation. It will also make it more important for trustees to ensure fund bank accounts, contribution records and employer payment details are up to date.

Low Income Super Tax Offset

From 1 July 2027, the Low Income Super Tax Offset is proposed to become more generous.

The income threshold will increase from $37,000 to $45,000, and the maximum LISTO payment will increase from $500 to $800.

This measure is designed to improve superannuation outcomes for lower-income earners.

CGT and negative gearing reforms

The Budget’s proposed capital gains tax and negative gearing reforms are not expected to affect the current CGT discount available within complying superannuation funds.

This means complying SMSFs should continue to benefit from the existing concessional CGT treatment available in the superannuation environment.

Discretionary trust tax measures

The proposed 30% minimum tax on discretionary trusts is not intended to apply to complying superannuation funds.

This is another important distinction between superannuation and other investment structures, particularly for clients comparing the tax treatment of investments held personally, through trusts, companies or SMSFs.

Who may benefit?

Members with a total superannuation balance below $3 million may be among the relative winners from the Budget.

We expect the changes to negative gearing, CGT and taxation of family discretionary trusts to result in a shift from investment outside of super, to greater use of super with increased establishments of new SMSFs.

While larger balances will still face additional tax and greater planning complexity, members below the Division 296 threshold can continue to benefit from the concessional tax environment that makes superannuation one of the most effective long-term wealth structures in Australia.

For clients considering whether an SMSF remains appropriate, the Budget provides another reminder that the answer will depend on their balance, investment strategy, contribution plans, retirement objectives and appetite for control.

What should SMSF trustees do now?

SMSF trustees should:

• Be aware of their total superannuation balance and whether Division 296 may apply.
• Consider whether the increased contribution caps create planning opportunities from 1 July 2026.
• Ensure their SMSF records and bank account details are up-to-date and ready for more frequent employer contributions under Payday Super.
• Speak with their adviser before making significant contribution, pension or investment decisions.

SuperGuardian will continue monitoring these measures and supporting advisers and trustees.

Please don’t hesitate to contact your SuperGuardian Client Manager if you would like to discuss any of these matters or your SMSF needs more generally.