Tax Planning
Better Targeted Super Concessions: What Workers and High-Balance Holders Need to Know
New legislation proposes higher tax rates on super earnings over $3m and boosted offsets for low-income earners—with major implications for savers.
By NomadicTax Research Team • 5-8 min read • March 1, 2026
## Overview of the New Legislation
On **11 February 2026**, the Australian Government introduced the **Better Targeted Superannuation Concessions Bill**. This bill aims to reshape taxation on super for two groups: high-balance account holders and low-income earners through LISTO (Low-Income Superannuation Tax Offset). ([superannuation.asn.au](https://www.superannuation.asn.au/media-release/explainer-new-super-tax-legislation-introduced-to-parliament/?utm_source=openai))
## Who’s Affected
- **High-Balance Holders** (around 90,000 Australians): Super earnings on balances above **$3 million** and **$10 million** will face steeper concessional tax rates.
- **Low-Income Workers** (approximately 1.3 million people): LISTO will be expanded so those earning under about **$45,000** become eligible, aiming to ensure super tax treatments are genuinely fair. ([superannuation.asn.au](https://www.superannuation.asn.au/media-release/explainer-new-super-tax-legislation-introduced-to-parliament/?utm_source=openai))
## How the Tax Rates Work
| Balance Threshold | Earnings Tax Rate |
|------------------|--------------------|
| Above **$3 million** and up to **$10 million** | 30% tax on earnings portion attributable to the balance above $3m. ([superannuation.asn.au](https://www.superannuation.asn.au/media-release/explainer-new-super-tax-legislation-introduced-to-parliament/?utm_source=openai)) |
| Above **$10 million** | 40% on earnings portion from amounts above $10 million. ([superannuation.asn.au](https://www.superannuation.asn.au/media-release/explainer-new-super-tax-legislation-introduced-to-parliament/?utm_source=openai)) |
Importantly, the tax is applied only on **realised earnings** (interest, dividends, capital gains after CGT discount)—not unrealised or “paper” gains. ([superannuation.asn.au](https://www.superannuation.asn.au/media-release/explainer-new-super-tax-legislation-introduced-to-parliament/?utm_source=openai))
## Improved Support for Low Earners via LISTO
- LISTO helps offset the 15% tax on contributions for those whose income falls in tax brackets that make the super contribution rate look punitive.
- Under the new bill, eligibility will align with the **upper limit of the second-lowest tax bracket** (roughly **$45,000**), bringing more workers in and reducing the unfairness where some workers previously paid more tax on super than regular income. ([superannuation.asn.au](https://www.superannuation.asn.au/media-release/explainer-new-super-tax-legislation-introduced-to-parliament/?utm_source=openai))
## Real-World Examples
**Example: Worker earning $44,000**
- Previously, someone on $44,000 didn’t qualify for older LISTO settings.
- Under the bill, they’ll be eligible and benefit from cleaner super contributions. ([superannuation.asn.au](https://www.superannuation.asn.au/media-release/explainer-new-super-tax-legislation-introduced-to-parliament/?utm_source=openai))
**Example: Super Balance at $4 Million**
- Say your total super balance is $4 million, with net realised earnings of $190,000.
- Portion above $3m = $1m → which is 25% of $4m → you pay 15% extra tax (Division 296 tax) on 25% of the earnings (~$47,500) → extra tax ~$7,125 in that year. ([superannuation.asn.au](https://www.superannuation.asn.au/media-release/explainer-new-super-tax-legislation-introduced-to-parliament/?utm_source=openai))
## What to Do Now
- **Review your super balance**—if you’re getting close to $3 million or above, start projecting tax impacts.
- **Check fund reporting**—because only realised earnings count, keeping clear records matters.
- **Understand your LISTO eligibility**—you may already qualify under the expanded threshold.
- **Future-proof your strategy**—consider how investment mix, asset rebalancing, and fund choices interact with realisation timing.
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These reforms, if passed, aim to balance fairness and sustainability in Australia’s super system. Whether you’re working hard to build up savings—or maximizing retirement benefits—these updates will alter how you strategise going forward.
**Key insight:** If you are a high-balance holder, earnings over $3m (especially over $10m) face steeper tax. If you're low income, improved offsets are coming to keep your super contributions working for you.