Key Financial Changes in FY26
As we enter the 2025–26 financial year, several key changes to Australia’s financial and superannuation landscape are taking effect. This article outlines the most significant updates and highlights the key action points investors should consider in response.
1. Superannuation Guarantee
The Change: From 1 July 2025, the minimum amount of superannuation employers must contribute to employees will increase from 11.5% to 12.0%.
Implications: While minor, the change will impact both employers and employees.
Employees will benefit from a higher minimum superannuation contributions
Employers will need to ensure payroll processes are updated to reflect the higher superannuation rate
Action Item: In the coming months, ensure the superannuation guarantee changes are properly reflected, either in internal systems or your superannuation account.
2. Transfer Balance Cap Indexation
The Change: From 1 July 2025, the amount of superannuation you can transfer from the accumulation phase to the retirement phase will be indexed from $1.9 million to $2.0 million.
Implications: The change will benefit both new retirees and those who have already begun an account-based pension.
New retirees can transfer more money into the tax-free retirement phase
Existing retirees with unused TBC may benefit from an increase to their personal transfer balance cap
Action Item: If you’re approaching or have begun retirement, speak with an advisor to see how the changes will impact your personal TBC.
3. Paid Parental Leave Superannuation
New Law: From 1 July 2025, parents will now receive superannuation payments on top of their government parental leave payments.
Implications: The new legislation will help ensure superannuation continues to compound even when parents take time away from work.
The Australian Taxation Office (ATO) will pay a lump sum directly to the parents’ superannuation account at the end of the financial year, with the first payments made from 1 July 2026.
Action Item: If you believe you or a loved one is eligible for the superannuation payment, please visit the ATO’s website for more information.
4. Government Co-Contribution
The Change: From 1 July 2025, the eligibility thresholds for the government superannuation co-contribution will increase.
The lower threshold will increase to $47,488.
The higher threshold will increase to $62,488.
Implications: Assuming an individual’s total income has not increased, this will increase the amount of eligible co-contribution.
Action Item: Consider taking advantage of the co-contribution if you’re income is expected to be below the higher threshold. The government will match you’re personal superannuation contribution up to $500, depending on your total income.
What Hasn’t Changed
The concessional contributions cap will remain at $30,000 for FY26
The non-concessional contributions cap will remain at $120,000 for FY26
What Could Change
While we don’t typically comment on proposed changes to financial or superannuation legislation, it appears likely the government will go ahead with an additional 15% tax on superannuation balances above $3 million. Furthermore, the laws propose taxing unrealised gains within superannuation above the $3 million limit.
We are tracking the proposed changes carefully and should they become legislation, we will provide a comprehensive to readers.
Should you wish to discuss any of the information detailed above in more detail, please reach out and one of our advisors will be in touch. We can be reached via email at admin@lpw.au or phone at 02 6185 2710.
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