Superannuation (Building a Stronger and Fairer Super System) Imposition Bill 2026

The Act directly affects individuals whose total superannuation balance exceeds $3 million in an income year because only those individuals can have taxable superannuation earnings or a very large superannuation balance earnings component. Superannuation fund trustees and administrators will be required to supply the data needed to calculate the components even though the liability falls on the individual member. Tax advisers accountants and financial planners who service high-balance clients will need to incorporate the new calculation into year-end planning and reporting. The Australian Taxation Office will administer the tax through existing mechanisms referenced in section 296-15 of the Income Tax Assessment Act 1997. Because the thresholds are expressed in total superannuation balance terms the Act reaches balances held across multiple funds or account types. Individuals with balances between $3 million and $10 million face the 15 per cent rate on the excess portion while those above $10 million face the combined 25 per cent effective rate on the top slice. The Act does not create obligations for employers or for low-balance members. Corporate trustees of self-managed superannuation funds will have compliance duties when preparing member statements but the primary legal liability remains with the individual. No information is given on the number of affected individuals or the aggregate revenue expected.

Individuals will want to know how the tax is calculated in practice. The amount equals 15 per cent of taxable superannuation earnings unless a very large component exists in which case the amount is 15 per cent of taxable superannuation earnings plus 10 per cent of the very large component. Taxable superannuation earnings are the earnings on the proportion of the balance above $3 million. The very large component is the earnings on the proportion above $10 million. People will also want to know the start date. The Act commences on 1 April 2026 so the first income year affected is the one that includes that date. Another common question is whether the tax replaces or adds to existing contributions tax or earnings tax. The text shows it is an additional tax imposed on top of the existing regime because it refers to tax payable under section 296-15 of the Income Tax Assessment Act 1997. Individuals will want to know whether they must pay the tax themselves or whether it is withheld by the fund. The Act does not specify collection mechanics so those details reside in the companion amendment Act and existing tax law. Finally people will want to know what happens if their balance crosses a threshold mid-year. The proportional method based on the percentage exceeding each threshold means the calculation automatically adjusts for movements during the income year.

The bill was introduced in the House of Representatives on 11 February 2026. It passed the House on 5 March 2026 after second reading debate on 3 and 4 March. The Senate received the bill on 10 March 2026 passed it the same day and it received royal assent on 13 March 2026 as Act No. 9 of 2026. The Act is therefore fully enacted. Commencement occurs on 1 April 2026 being the first quarterly date after assent. No further parliamentary steps are required. The text of the Act as passed by both Houses is available and an electronic version is on the Federal Register of Legislation. No schedules of amendments were made in the Senate. The Bills Digest and explanatory memorandum prepared for the bill remain relevant for interpretation. Because the Act has received assent the tax it imposes applies from the commencement date onward. Future income years will be subject to the rates set out in section 5 unless Parliament amends the Act.

Section 4 creates the power to impose the tax by declaring that tax payable under section 296-15 of the Income Tax Assessment Act 1997 is imposed. This supplies the constitutional foundation required for taxation legislation. Section 5 creates the duty on affected individuals to pay the calculated amount for each income year. The duty is quantified by reference to taxable superannuation earnings and where applicable the very large superannuation balance earnings component. Section 6 limits the scope of the imposition power by providing that if the tax would exceed Commonwealth legislative power in relation to a person then section 4 does not impose the tax in relation to that person. No new rights are conferred on taxpayers by the Act. The Act does not create any review or objection rights because those matters are governed by the Income Tax Assessment Act 1997 and the Taxation Administration Act 1953. The only explicit protection is the severability rule which preserves the validity of the remainder of the imposition. No enforcement powers are stated in the Act itself. The Australian Taxation Office will rely on its existing powers under the taxation Acts to assess collect and recover the tax.

The money raised is the tax calculated under section 5. For persons without a very large component the amount is 15 per cent of taxable superannuation earnings. For persons with a very large component the amount is 15 per cent of taxable superannuation earnings plus 10 per cent of the very large superannuation balance earnings component. No penalties or offences are created by the Act. Enforcement and collection provisions are not included in the text and therefore remain governed by the Income Tax Assessment Act 1997 and the Taxation Administration Act 1953. The Act does not specify due dates payment methods or interest on late payments. Because the tax is imposed by reference to section 296-15 of the Income Tax Assessment Act 1997 the assessment notice objection and review processes of that Act apply. No minimum threshold or exemption is stated in the Act. The severability clause in section 6 ensures that any constitutional limit on the tax for a particular person does not invalidate the imposition for others. Revenue from the tax will form part of consolidated revenue once collected.

The Act presents several legal and policy trade-offs. The decision to enact a separate imposition Act rather than include the charging words in the amendment bill reflects the constitutional requirement that laws imposing taxation deal only with the imposition of tax. Section 6 addresses potential validity risks by severing the application of the tax for any person in relation to whom it would exceed power. This approach protects the overall scheme while acknowledging that the tax applies to individuals and their superannuation interests. A further trade-off lies in the use of total superannuation balance as the sole threshold test. The proportional earnings calculation avoids a flat tax on the entire balance but requires precise attribution of earnings to the excess portions which increases compliance complexity for funds and members. The two-tier rate structure creates a sharp increase in marginal tax once the $10 million threshold is crossed. Because the Act relies on definitions supplied by the companion amendment bill any uncertainty in those definitions will affect the operation of sections 4 and 5. The absence of transitional rules or anti-avoidance provisions in this Act means those matters must be located in the Treasury Laws Amendment Act. These design choices balance the objective of reducing concessions for large balances against the need to maintain a workable and constitutionally sound tax.

Because the Act has received royal assent the tax it imposes applies from 1 April 2026. Individuals with a total superannuation balance above $3 million will have an additional tax liability equal to 15 per cent of their taxable superannuation earnings for each income year. Individuals whose balance exceeds $10 million will pay the further 10 per cent on the very large superannuation balance earnings component. Superannuation funds will need to report the necessary components to the Australian Taxation Office and to members so that the tax can be assessed. The existing tax on superannuation earnings continues to apply and the new tax sits on top of it. No immediate change occurs to contribution caps or to the tax treatment of balances below the thresholds. The severability provision in section 6 means that if any part of the imposition is later found invalid for a particular person the remainder of the tax continues to apply to others. Future budgets or policy changes may alter the thresholds or rates but those alterations would require further legislation. The Act does not alter the regulatory framework for superannuation funds or the prudential standards applied by the Australian Prudential Regulation Authority.

New super tax calculation explained: Section 5 shows exactly how the 15 per cent rate applies to earnings above the $3 million total superannuation balance threshold. Two-tier rate structure starts in April: The Act imposes an extra 10 per cent on the very large component once balances exceed $10 million creating a combined top rate of 25 per cent on that slice. What the imposition Act actually does: It supplies the constitutional charging provision for the tax defined in section 296-15 of the Income Tax Assessment Act 1997 without altering assessment rules. Severability clause protects validity: Section 6 ensures the tax remains enforceable for most individuals even if it is limited for a particular person. First affected income year begins 1 April 2026: The commencement table in section 2 fixes the start date as the next quarterly date after royal assent. Proportional earnings method avoids flat tax: Taxable superannuation earnings and the very large component are calculated by reference to the percentage of balance exceeding each threshold. Companion bill supplies the definitions: Section 3 incorporates taxable superannuation earnings and very large superannuation balance earnings component from the Income Tax Assessment Act 1997 as amended. No new penalties in this Act: Enforcement relies on existing provisions in the Income Tax Assessment Act 1997 and the Taxation Administration Act 1953.