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Rated #1 for Technical Support 13 years running by Wealth Insights¹ our FirstTech team brings award-winning expertise to every adviser conversation. 

 

For more than 25 years, our team has offered expert guidance across a wide range of technical areas, from superannuation and contributions, to aged care and estate planning.

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Due to the commencement of the new Aged Care Act on 1 November 2025, FirstTech have released a new Aged Care quick reference guide from 1 November 2025 to 31 December 2025 that includes the new rules.

 

This quick reference guide provides the following rates and thresholds:

 

- Post 1 Nov 2025 rules - people who first entered residential aged care on or after 1 November 2025

- Pre-1 Nov 2025 rules - people who first entered residential aged care before 1 November 2025

- Support at Home - replaced the Home Care Packages program from 1 November 2025 

 

 

The Government has today (13 October) announced it is making changes to the design and implementation of the proposed $3m Division 296 tax.

The Government says this was in response to stakeholder feedback and further consultation will be undertaken with the superannuation industry prior to a delayed commencement date of 1 July 2026.

In addition, the Government announced an increase to the Low Income Super Tax Offset income threshold and payment amount, which will benefit low income working Australians.

 

Division 296 tax changes

Key changes
The Government has announced a number of key changes to the proposed Division 296 tax:

  • New two-tier tax on large super balances
    From 1 July 2026, superannuation earnings for individuals with total super balances (TSB) above $3 million will be taxed at higher rates:
    • 15% on earnings attributable to TSB between $3 million and $10 million.
    • 25% on earnings attributable to TSB above $10 million.

These tax rates will apply in addition to the fund’s concessional tax rate of 15 per cent on taxable income.

  • Indexation introduced
    Both the $3 million and the new $10 million thresholds will be indexed to the Consumer Price Index, reducing bracket creep and limiting the number of affected individuals over time.
  • Realised earnings approach
    Tax will be calculated on a fund’s realised (taxable) earnings, attributed to members with high balances, aligning with existing income tax concepts.
  • Start date deferred
    The reforms will now commence from 1 July 2026 (previously 1 July 2025), with first assessments expected in the 2027–28 financial year.

New realised earnings approach
As part of these changes, the Government will not proceed with calculating a member’s earnings based on changes in their TSB. Instead, the tax will be based on 'realised earnings', which will be based on a fund’s actual taxable income with adjustments made for contributions and pension phase income.

Impacted members will then be attributed an appropriate share of the fund’s realised earnings based on existing reporting mechanisms or on a fair and reasonable basis (with ATO guidance).

How it is proposed to work
Each year the ATO will determine each member’s liability for Division 296 tax based on their TSB at the end of the year. The ATO will then contact an impacted member’s super funds to request the member’s share of the fund’s realised earnings and will then use these figures to calculate the member’s additional tax liability under the new two-tier system. Those members will then still have the option of paying the tax directly or from their superannuation funds.

What’s still to be confirmed
The Government has advised that additional changes are being considered to ensure fair treatment for defined benefit members and to extend the existing exemption for some judges to improve consistency across jurisdictions.

Next steps
The Government has announced it will introduce legislation to implement these changes as soon as possible in 2026. In addition, further consultation will be undertaken with the superannuation industry and other relevant stakeholders to implement the changes.

For more information
Treasury factsheet: Better Targeted Superannuation Concessions  https://treasury.gov.au/publication/p2025-709385-btsc


Low Income Super Tax Offset (LISTO) changes
The LISTO is a government superannuation payment which offsets the contributions tax paid by funds on superannuation contributions for low income earners.

The Government has announced that from 1 July 2027 it will increase the LISTO income threshold and payment amount as follows:

  • the income threshold will rise from $37,000 to $45,000
  • the maximum LISTO payment will increase from $500 to $810.

This ensures employees receiving salary and wages of up to $45,000 will receive a full refund of the 15% contributions tax levied on their 12% superannuation guarantee contributions.
 

For more information
Treasury factsheet: Low Income Superannuation Tax Offset (LISTO) https://treasury.gov.au/publication/p2025-709385-listo

Client summary

To assist with advising your client's of the proposed changes, FirstTech has drafted suggested wording that you may find useful.

 

 

Two bills were introduced to Parliament regarding the PayDay super measures:

 

- Treasury Laws Amendment (Payday Superannuation) Bill 2025

 - Superannuation Guarantee Charge Amendment Bill 2025

 

Under the 'Payday Super' reforms, from 1 July 2026 employers will be required to pay Superannuation Guarantee contributions aligned with pay cycles, rather than quarterly.

 

Latest articles

Testamentary trusts - tax issues

A testamentary trust is a widely used estate planning tool that offers a number of benefits, including tax efficiency, asset protection and social security benefits.

This article explores key tax-related considerations associated with testamentary trusts, focusing on:

- Tax concessions for minor beneficiaries
- The tax effectiveness of streaming trust income
- The tax implications of transferring personal assets or superannuation death benefits to a testamentary trust via the deceased estate

Removal of CGT main residence exemption for foreign residents

Foreign residents for tax purposes are no longer eligible to claim the main residence exemption for properties sold after 30 June 2020.

Clients in this situation may face significant CGT liabilities and should consider the tax implications of selling their former home while classified as a foreign resident.

 

 

 

 

 

Transitional CGT relief: Disposal of assets with deferred capital gains

Before recommending that an SMSF trustee sells fund assets, it’s important to consider the potential CGT implications including any deferred gains that are required to be brought to account under transitional CGT rules.

This applies where a fund using the unsegregated assets method applied the transitional CGT relief rules back in 2016-17, due to the introduction of the transfer balance cap or the changed taxation of transition to retirement income streams

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 ¹ Wealth Insights Platform Service Level Reports - CFS First Tech team was rated #1 by Wealth Insights for Technical Support every year since 2013.

 

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