Government flags changes to proposed Div 296 measure

On 13 October 2025, Treasurer Jim Chalmers announced changes to the Better Targeted Superannuation Concessions policy, that revises the earlier Div 296 ITAA design and makes several practical changes that materially affect SMSF trustees and their advisers.

Items of most significance to clients and advisers include the:

• delay to the start date of the measures, with balances now to be assessed at 30 June 2026;
• total concessional tax rate applied to earnings being increased from its existing level of 15% to:
  • 30% on earnings on balances between $3 million and $10 million; and
  • 40% on earnings on balances above $10 million;
• that both thresholds will be indexed annually in line with the Consumer Price Index;
• removal of the taxation of unrealised capital gains; and
• implementation of measures to ensure defined benefit pensions receive similar taxation treatment to other types of superannuation pensions.

There has also been an announcement about the increasing of the low-income superannuation tax offset from $500 to $810, and of the eligibility threshold from $37,000 to $45,000.

At present there is no indication of when we will see a revised Bill, however as we have advised throughout the consultation process, our view is to continue to keep calm and carry on until any legislation passes. We will continue to keep you up to date on developments.