Div 296: What it means for your super

• Check your super balance in FirstNet. If you have additional super elsewhere, check your TSB with the ATO
• Model the expected growth of your Total Super Balance over the next 3–5 years.
• Prepare some questions to ask an expert: the CFS guidance team can help connect you with the right financial advice.
• Review your beneficiaries and estate planning documents.
• Revisit any insurance you may hold inside your super.

• Move assets out of super before understanding how you may be affected.
• Rely on hearsay or media reports. Full details of how the rules will be applied are still to be confirmed. 

The new rules, formally known as Better Targeted Super Concessions (Division 296), target Australians with a TSB above $3 million. The vast majority of Australians won’t be affected.

It's an additional tax, that sits on top of the existing tax – generally 15% – applied inside super earnings (effectively bringing it to 30%).

However, only the proportion of your superannuation earnings attributable to the part of your TSB that is over $3 million will be affected.

The tax rate on realised earnings attributable to the portion of a TSB above $10 million will be an additional 10%, or 25% in total. Taking into account the tax paid by the super fund this effectively increases overall tax to 40%.

It’s worth noting that that tax rate is still lower than the highest marginal tax rate of 45%.

The new rules became law on 13 March 2026 and take effect from 1 July 2026.

Consultation on the draft regulations supporting the legislation closed on 7 April 2026, with further details of how the rules will be applied to be confirmed in coming months.

The draft regulations currently provide detail how Div 296 may work in practice, particularly for defined benefit interests, large Australian Prudential Regulation Authority (APRA)-regulated funds, such as CFS, and Self-managed Superannuation Funds (SMSFs).

They outline things like:

• how Div 296 earnings are split between members (including providing a formula for SMSFs to apportion fund-level earnings to each member).
• how to calculate earnings for defined benefit pensions.
• what’s excluded from Div 296 (including certain judges’ pensions, foreign super interests and other special interests).
  

Your TSB comprises all your superannuation interests including any amounts that aren't held in your super with CFS. It includes:

• accumulation and pension balances held with CFS.
• any balances that may be held in other super funds (including SMSFs).
• defined benefit interests (calculated separately).
• rollovers in transit.

Your CFS FirstNet account view shows your CFS super balance across all accounts held with us.

Log in via FirstNet or download our mobile app to check your CFS super balance.

Your TSB also includes any super accounts held elsewhere. You can look up your Total Superannuation Balance on ATO online services via your MyGov account.

Whether and how much you may be affected by the new rules will depend on a number of things, including your TSB at the beginning and at the end of a financial year – whichever is higher. 

However there is a transitional rule in place for 2026-27 that means only your TSB at the end of the year will count. 

Even if your TSB exceeds the $3 million threshold, the effective tax rate on earnings attributable to the portion of your TSB that exceeds $3 million (but is less than $10 million) may only be up to a maximum of between 20% and 30% – depending on how much of your earnings are made up of capital gains and taking into account the 33% CGT discount.

This may be less than your marginal tax rate, or what you could end up paying if you were to move your money outside super. 

Ask your adviser to model the next 3–5 years based on current returns and concessional contributions, and other possible contributions, such as downsizer contributions. 

Even if your TSB is well under $3 million today, growth and contributions could push you over the threshold.

For balances between $3 million and $10 million a maximum tax rate of between 20% and 30% may still compare very favourably with investing outside super and paying tax at marginal rates of up to 45%. For balances over $10m you should seek specialist tax advice. 

A new tax on earnings attributable to your TSB above $3 million could lead to conversations about which assets to leave in super and any that should be held outside. As a result you may need to review your wills and estate plans as moving assets out of super would mean they will no longer be covered by a superannuation binding death benefit nomination and may now form part of your estate.

If you’re considering restructuring your super, be sure you don’t accidentally cancel valuable insurance held inside your super. Review your cover before making any changes. 

Before withdrawing benefits out of super it will be extremely important to understand how your earnings would be taxed inside super compared to outside super as even including Division 296 tax, super may still be the most tax effective option for many people.

This is particularly true given recent proposed changes to Capital Gains Tax rules in the 2026-27 Federal Budget, including plans to abolish the 50% Capital Gains Tax discount on assets held for 12 months (outside super) and replace it from 1 July 2027 with CPI indexation and a minimum 30% tax on realised capital gains.

Seek professional financial advice before making major changes. 

A brief overview of how the new rules will work is available here, and the ATO explains the new legislation on its website.

It’s best to consult official sources, such as the ATO, or your financial adviser, to ensure any information you may be acting on is relevant for you.  

CFS monitors Treasury announcements, Senate activity, and ATO guidance, and we’ll provide updates when legislation changes or final rules are known.

Check your super balance by logging into FirstNet or downloading the app

Our guidance consultants can help connect you with the most appropriate financial advice option for you.  

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