Prepare for any changes that may be occurring in 2026 and beyond.
Looking ahead: What’s changing in 2026?
At this time of year, many of us start thinking about what’s next – new goals, fresh opportunities and trying to understand what’s ahead. Over the next year, a number of changes to superannuation, tax and even aged care may affect you or your loved ones. Some changes have been confirmed while others have been proposed or are pending confirmation. Some may impact your financial circumstances.
Here is a summary of some of the key changes in 2026 and beyond. It’s a great time to speak to your financial adviser to discuss these changes and any opportunities that may be available. Most of the changes detailed involve complex rules that may lead to penalties if not followed correctly. Your financial adviser can help you understand these changes, turn complexity into clarity, help you make decisions that keep your future on track and help you avoid costly breaches. Refer to ato.gov.au for more information.
Confirmed changes
Personal tax cuts from 1 July 2026
What this means: Most taxpayers will receive modest tax cuts starting from 1 July 2026. The 16% tax rate on taxable income between $18,201 and $45,000 will reduce to:
- 15% from 1 July 2026
- 14% from 1 July 2027.
There will be no changes to the other marginal tax rates and thresholds. The following table summarises the potential tax savings based on a range of taxable incomes.
| Taxable income | Annual tax savings in 2026/27* | Annual tax savings from 2027/28 onwards* |
| $25,000 | $68 | $136 |
| $35,000 | $168 | $336 |
| $45,000 or more | $268 | $536 |
*Compared to 2025/26 financial year.
How it may impact you: Pre-tax (concessional) contributions into superannuation are generally taxed at 15%. With a reduced personal tax rate, making tax deductible super contributions for those with income below $45,000 will not be as tax effective. If you fall into this category, there may be other types of contribution to consider that may qualify you for other benefits, such as personal contributions that may attract the Government co-contribution.
Carry forward or ‘catch up’ concessional contribution opportunities before 30 June
What this means: If your concessional contributions (CCs) in a financial year are below the annual CC cap, you can accrue these unused amounts and carry them forward for up to five years. This means if you meet certain eligibility rules, you can make larger CCs in a later financial year. This may give you greater flexibility to make larger CCs when your circumstances allow.
What’s changing? The unused CC cap amounts from 2020/21 will expire if not used by 30 June 2026, as only unused CC cap amounts from five prior financial years are available to use. Furthermore, if your total super balance (TSB) will grow to $500,000 or more on 30 June 2026, 2025/26 may also be the last financial year that you can take advantage of catch up CCs.
To be eligible to make catch up CCs, you must:
- Have a ‘total superannuation balance’ below $500,000 on 30 June 2025.
- Be eligible to claim a deduction if making personal contributions.
- Have unused CC cap amounts accrued from one of the five prior financial years.
How it may impact you: The CCs you contribute is generally taxed at 15%. Any earnings are also taxed at a concessional rate of 15%. Compare this with your marginal rate, which could be up to 47%.
Depending on your situation, this strategy could result in a tax saving of up to 32% and allow you to increase your super savings.
New aged care rules and fees commenced on 1 November 2025
What this means: New aged care rules changed certain residential aged care fees and how financial support from the Government is allocated to residents in aged care facilities and those receiving support at home.
What’s changed? Residential care fees are broken down into ‘accommodation fees’ and ‘ongoing care fees. The changes impact both of these fee categories, including who is eligible for Government assistance and how much residents need to contribute towards these costs, based on their income and assets.
Residents with lower levels of income and assets who are eligible for Government support will continue to receive certain levels of subsidised care from the Government.
Residents with higher levels of income and/or assets are expected to contribute more to the cost of their accommodation costs and ongoing care.
Changes have also been made to the way that the Government will provide support to older Australians living at home. One of the key changes is the replacement of the previous ‘Home Care Packages’ with a new ‘Support at Home’ program.
How it may impact you: If aged care is something you or your family might need in the coming years, now is the time to start the conversation. Understanding the rules early can help you make informed choices and avoid surprises later.
Exiting certain legacy lifetime and life expectancy pensions
What’s changed? Regulations commenced on 7 December 2024 that provide a five year window to commute lifetime, life expectancy and market linked income streams (also known as term allocated pensions) which were non commutable.
For Centrelink recipients with legacy pensions, any social security debts will be waived if a legacy pension is commuted correctly within the amnesty period from 28 October 2025 to 6 December 2029.
How it may impact you: If you have a legacy pension, there are tax, transfer balance cap and social security implications to consider before exiting a legacy pension. It’s important to consider the impact of all these considerations as exiting a legacy pension may not be the best option. For example, consider the impact of losing a full or partial assets test exemption when exiting the pension against the flexibility to access your funds.
Proposed or unconfirmed changes
- Super contribution caps may increase from 1 July 2026 – Unconfirmed, awaiting release of wage growth data.
- Pension transfer balance cap may also increase from 1 July 2026 – Unconfirmed, awaiting release of inflation data.
- Keep an eye on Division 296 tax for higher super balances – Proposed, awaiting draft legislation.
Other changes
Some other changes and proposals to consider in the year ahead and beyond:
- Help to Buy scheme commences 5 December 2025
The Help to Buy scheme allows eligible persons or families to purchase a home with as little as a 2% deposit. If that’s on your radar, your adviser can help you weigh up whether this scheme fits your plans. The scheme has commenced. For more information, refer to Housing Australia’s First Home Buyers website.
- Superannuation guarantee (SG) payments to align with salary and wages (Payday Super)
From 1 July 2026, superannuation guarantee (SG) payments are to be made within a specified time period (generally seven days) from when salary and wages are paid. This measure is now law and commencing on 1 July 2026. Refer to the ATO page on Payday Super for more information. Your financial adviser can help you understand how your SG payments will be received to ensure you do not breach your CC caps, particularly in the year that Payday Super commences.
- LISTO rate and income threshold: Proposed increase
The Government proposed changes to the Low Income Superannuation Tax Offset (LISTO). From 1 July 2027, the maximum tax offset is proposed to increase from $500 to $810 and the income threshold may increase from $37,500 to $45,000. This proposal is not yet law and needs to be passed by Parliament.
Source: MLC
