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Treasury issued a Media Release and exposure draft legislation for consultation regarding the proposed Division 296 tax, with consultation closing on 16 January 2026.

This new exposure draft legislation reflects changes announced by the Treasurer to the original Division 296 proposal in response to stakeholder feedback, including:

-  New two-tier tax on large super balances:  Applying an additional 15% tax to earnings attributable to a member’s total superannuation balance (TSB) between $3 million and $10 million, and an additional 25% on earnings attributable to TSB above $10 million.

-  Indexation: Both the $3 million and the new $10 million thresholds will be indexed to the Consumer Price Index.

-  Realised earnings approach:  In most cases, tax will be calculated on a fund’s realised (taxable) earnings, attributed to members with high balances, aligning with existing income tax concepts.

-  Deferred start date:  The reforms will now commence from 1 July 2026 instead of 1 July 2025.

At a high level, the exposure draft legislation applies these announced changes.  However, much of the detail about many aspects of this amended proposal will be confirmed in Regulations.  No draft Regulations have been released for this purpose, although Treasury have released a document ‘Additional guidance on proposed regulations’.

For more information on surprises and uncertainties in the exposure draft legislation, see FirstTech Newsflash

The Government has released the Mid Year Economic and Fiscal Outlook (MYEFO) for 2025-26.

The mid-year update restated a number of previously announced proposed measures, including:

-  Resetting deeming rates:  the Government Actuary will review market returns on financial assets twice a year, from March 2026, and provide a recommendation to the Government on the deeming rate

-  LISTO (Low Income Super Tax Offset): increase in threshold from $37,000 to $45,000 from 1 July 2027, increase in maximum payment from $500 to $810

-  Division 296 tax:  from 1 July 2026,  additional 15% tax on earnings attributable to TSB between $3M and $10M, and 25% on earnings attributable to TSB above $10M.  Tax will be calculated on a fund's realised (taxable) earnings

-  Support at Home: additional 63,000 program places by 30 June 2026.

The Minister has announced  the social security rates and thresholds for 1 January 2026 have been released.  

Carer Allowance increases to $162.60pf and Pharamaceutical Allowance for a single person to $7.00pf.

The FirstTech Centrelink rates and thresholds for 1 January 2026 is available here.