Superannuation Policy Alert: Government proposes increase in concessional tax rate on super accounts above $3 million to 30% from 2025-26
The Federal Government has announced proposed changes to the concessional tax rate on earnings for superannuation accounts with balances of more than $3 million to increase to 30%, from up to 15%, from 2025-26.
Treasurer Jim Chalmers and Assistant Treasurer and Minister for Financial Services Stephen Jones said in
media release this change was expected to apply to about 80,000 people.
The proposed adjustment:
- is not retrospective
- does not impose a limit on the size of superannuation account balances in the accumulation phase and applies to future earnings
- will see the concessional tax rate applied to future earnings for balances above $3 million increase to 30 per cent.
- will commence from 2025-26
Individuals with over $3 million in super will continue to benefit from more generous tax breaks on earnings on the $3 million below the threshold.
The change is expected to generate about $2 billion of revenue in its first full year of revenue after the next Federal election, which is due by 2025.
The Government will introduce enabling legislation to implement this adjustment as soon as practicable.
Further consultation will be undertaken with the superannuation industry and other relevant stakeholders to settle the implementation of the measure.
Dr Chalmers and Mr Jones also said the
2022-23 Tax Expenditures and Insights Statement released today showed revenue foregone from superannuation tax concessions was about $50 billion a year and projected to exceed the cost of the Age Pension by 2050.
More information about the policy details will be published on the Treasury website.