Superannuation’s changes in July and beyond will affect everyone

Superannuation changes are on the way, battlelines have been drawn for the election, and experts say it pays to be prepared.

A suite of superannuation rule changes and threshold increases will keep workers, bosses and savers on their toes in the coming months – and that’s before any new policies are unveiled in the federal election campaign.

Superannuation specialists say the biggest change – the July 1 compulsory employer super contribution rise from 11.5 per cent to 12 per cent – will affect almost all workers and employers.

Another rise is coming for the transfer balance cap, which limits how much super can be used to start a tax-free super pension. Indexation of this cap will see it increase from $1.9m to $2m from July 1.

There are also moves in super balance thresholds that determine eligibility to make non-concessional contributions.

The increase in compulsory employer super contributions will grow nest eggs. Picture: iStock

Other key thresholds are not changing, such as the $30,000 annual cap on concessional tax-deductible contributions, and the cap on non-concessional contributions of $120,000 a year, but it is likely they will rise in 2026 as they are indexed to wages growth.

MLC TechConnect senior technical services manager Julie Steed said the indexation of super thresholds “adds an additional layer of complexity”.

More complexity could come at the election, with some superannuation battlelines already drawn. The Coalition wants to allow people to use their super for a home deposit, while Labor remains committed to its plan to introduce a 15 per cent tax on balances above $3m despite failing to get it through the current parliament.

Financial strategist Theo Marinis said Labor “couldn’t get it through because it’s a bad policy”.

“Unless there’s a massive change in the makeup of the Senate, I don’t see that changing,” he said.

Mr Marinis said more super policies could be announced in the election campaign, but they would likely be good news.

“During elections they tend to give out sweeteners rather than take them away,” he said. “If there’s going to be radical changes, they will do it at the first budget after the election.”

Mr Marinis urged super fund members and business owners to “be on your guard, or at least have someone looking after it for you” in the next few months.

“People claim that super keeps changing, but in some ways its bad and some ways it’s good,” he said.

“Super is now tax exempt when you are over 60. It never used to be.”

Election promises around super are expected to be positive for savers. Picture: iStock

Goldsborough Financial Services director Brenton Miegel said it was hard to know what new super policies might emerge in the election campaign.

“I think it will be a battleground and there’s some fairly clear policy differences between the two major parties that people need to be aware of,” he said.

“I would like to see the concessional cap increased because that provides people leading into retirement with an opportunity to accumulate more in a very tax-effective environment.”

Mr Miegel said the overall effect of the rise to 12 per cent compulsory super would be positive as more money boosted people’s nest eggs.

“It does hit business owners, but I think business owners take into account the increase in superannuation contributions when they look at an increase in salary with their staff,” he said.

“Where people have to be careful is if they have a fixed amount they’re salary sacrificing into super. The $30,000 concessional contribution cap is not changing, so they need to be aware of not going over that cap,” he said.

“It presents a great opportunity late in the financial year to review your super.”

Originally published as Superannuation’s changes in July and beyond will affect everyone