What the Federal Budget 2026/27 means for your super

19 May 2026

On 12 May 2026, Treasurer Jim Chalmers announced the Federal Budget 2026/27. Delivered against a backdrop of rising global oil prices, inflation and economic uncertainty, the Budget focused heavily on cost-of-living relief, housing affordability and tax reform.

For most super members, the direct impact of the proposed changes is relatively modest. However, there are some important changes to be aware of, particularly if you hold investments outside of super, own an investment property, or are approaching retirement.

The changes proposed as part of the Budget are proposals only and are not yet legislated. Here’s a simple breakdown of the key changes and what they could mean for you if they are introduced in the future.

Super remains a tax-effective way to build your retirement savings

Under the proposals, the core rules governing superannuation would remain largely untouched.

Tax on earnings inside your super fund, including retirement income streams, would remain unchanged. Superannuation funds would also be excluded from several of the broader tax reforms announced in the Budget, including the new minimum tax on discretionary trusts and the changes to negative gearing.

With superannuation exempt from the proposed changes to capital gains tax (see below), superannuation remains a tax-effective way to grow your retirement savings.

On 1 July 2026, the concessional (before-tax) contribution cap will rise from $30,000 (2025/26) to $32,500 (2026/27), and non-concessional (after-tax) caps will rise from $120,000 (2025/26) to $130,000 (2026/27). The higher caps could create new opportunities to contribute more to super in a tax-effective way.

Another change that has already been legislated to come into effect on 1 July 2026 is Payday Super. Employer contributions will now be invested with every pay cycle rather than quarterly, which means your money starts working for you sooner and compounds faster over time.

The higher contribution caps and the introduction of Payday Super make this an ideal time to grow your super for a brighter financial future.

Capital gains tax changes

One of the biggest reforms in the Budget is a proposed overhaul of capital gains tax (CGT), which if passed into legislation, would take effect from 1 July 2027.

Currently, if you sell an investment you’ve held for more than 12 months, the capital gain is generally discounted by 50 per cent before tax is applied. Under the proposed changes, that discount would be replaced with cost base indexation, which adjusts the original purchase price for inflation, alongside a new 30 per cent minimum tax on real capital gains.

The changes are expected to apply to investments held by individuals, trusts and partnerships.

For most super members, there is no immediate impact on how your super is taxed day to day. However, over time, the changes may influence how super funds manage certain investments.

That means investment earnings inside your super would continue to be taxed at just 15 per cent, long-term capital gains at around 10 per cent, and in pension phase – zero.

There are also some important exemptions:

• Your family home remains fully exempt from CGT.

• Age Pension recipients are exempt from the new 30 per cent minimum tax.

• Any gains built up before 1 July 2027 continue to be treated under the current rules.

Changes to negative gearing

From 1 July 2027, under the proposed changes and subject to legislation being passed, negative gearing on residential property would be limited to new builds, negative gearing on established residential properties will be restricted.

Under the proposed rules, rental losses from established properties would only be deductible against rental income or future capital gains from residential property, rather than against your regular income. Excess losses could still be carried forward to future years.

Importantly, under the proposed changes, if you already own an investment property, or entered into a contract before 7.30 pm AEST on 12 May 2026, your current arrangements would be protected until you sell the property. Property investments held inside superannuation would also be excluded from these changes.

Strengthening oversight of the super and investment system

The Government has committed $17.8 million over four years from 2026/27 to strengthen oversight, governance and enforcement across the managed investment and superannuation sectors. The funding will support stronger regulatory supervision by the Australian Securities and Investments Commission (ASIC), improved use of data and enhanced governance standards across investment schemes.

The Government will also consult on expanded data collection powers to improve transparency and oversight across the sector.

Review of the super performance test

The Government has also confirmed it will consult on potential changes to the superannuation performance test, which is used to assess whether super funds are delivering good outcomes for members.

The review is aimed at removing unintended barriers that may discourage long-term investment, while still maintaining strong protections for members.

Stronger fraud protections

The Budget includes $86.3 million over four years to strengthen fraud prevention across the tax and super systems. This includes enhanced real-time monitoring of high-risk account activity and stronger powers for the Australian Taxation Office (ATO) to detect and respond to fraud.

The aim is to make it harder for criminals to access Australians’ retirement savings as scams and identity theft become increasingly sophisticated.

If you’re retired or close to retirement

Age Pension settings unchanged

There are no proposed changes to Age Pension deeming rates, the assets test or the income test. Regular indexation of payment rates and thresholds will continue as normal. Age Pension recipients are also exempt from the proposed new 30 per cent minimum capital gains tax from 1 July 2027.

Medicare levy thresholds increasing

Under the proposed changes, the Medicare levy low-income thresholds would increase by 2.9 per cent, backdated to 1 July 2025. For seniors and pensioners:

• The single threshold increases to $44,268

• The family threshold increases to $61,623

If your income falls below these thresholds, you may pay a reduced Medicare levy or no levy at all.

Increased aged care investment

The Budget includes more than $600 million over four years to support residential aged care supply and improve access to care, alongside ongoing investment in My Aged Care services and provider sustainability.

As Australians live longer, aged care is becoming an increasingly important part of retirement planning. These investments are aimed at improving both the availability and quality of care options over time.

Other changes that may affect you if passed into legislation

New tax offset for workers

From the 2027/28 financial year, eligible workers will receive a new Working Australians Tax Offset (WATO) worth up to $250 per year. Combined with the existing Low Income Tax Offset, the measure increases the effective tax-free threshold for work income to around $24,985.

$1,000 work expense deduction

From the 2026/27 financial year, Australians will be able to claim up to $1,000 in work-related expenses per year without needing to keep receipts. The measure is designed to reduce paperwork and simplify access to deductions many Australians already claim.

Minimum tax on discretionary trusts

From 1 July 2028, a new 30 per cent minimum tax will apply to the taxable income of discretionary trusts. Complying superannuation funds are excluded from the changes. If you hold investments through a discretionary trust, it may be worth speaking with a financial adviser. The Government has proposed a three-year transition period from 1 July 2027 to allow time for restructuring where needed.

What this means for you

For most Brighter Super members, the Budget does not materially change how your super is taxed or managed day-to-day, and there is no immediate action you need to take. Some proposed changes may be more relevant if you hold investments outside super, own an investment property, receive the Age Pension, or are planning for retirement.

If you’re unsure how these changes may affect you, Brighter Super’s team of superannuation specialists and financial advisers are here to help.

Find out more about our financial advice services, which includes Brighter Super Advice Plus – comprehensive personal financial advice covering your broader financial situation and investments outside super, delivered through one of our trusted external advice partners¹.

A great time to boost your super

Superannuation remains a tax-effective way to grow your retirement savings. The proposed Budget changes could provide a good opportunity to review your super strategy. Whether you want to salary sacrifice more, make a personal contribution, or better understand how the changes could affect you, our advisers can help you put the right plan in place.

Book a Super Health Check, attend one of our upcoming seminars and webinars, or call us on 1800 444 396 to speak with a Brighter Super financial adviser. They can help you explore strategies and put a plan in place and to maximise your super and build long-term wealth for a brighter future.

A note on these changes

1. Brighter Super has engaged Financial Advice Matters Group Pty Ltd ABN 11 605 631 598 Corporate Authorised Representative No 1234989 of Alliance Wealth Pty Ltd AFSL 449221 ABN 93 161 647 007 to provide comprehensive advice services to Brighter Super members. Brighter Super does not guarantee and is not responsible for any advice provided by our advice partners and their adviser networks, the quality of the advice or their obligations.

The information contained is up to date at the time of publishing. Some of the information may change following its release. Any questions can be referred to Brighter Super by calling 1800 444 396, or by emailing info@brightersuper.com.au.

Brighter Super Trustee (ABN 94 085 088 484) (AFSL 230511) (the Trustee) as trustee for Brighter Super (ABN 23 053 121 564) (RSE R1000160) (the Fund). Brighter Super may refer to the Trustee or the Fund as the context may be. Brighter Super products are issued by the Trustee on behalf of the Fund.

You should obtain and consider the Product Disclosure Statement (PDS) and Target Market Determination (TMD) before making any decision to acquire any products. A TMD is a document that outlines the target market a product has been designed for. Find the PDSs and TMDs at brightersuper.com.au/pds-and-guides.

This article provides general advice only and does not take into account your individual objectives, financial situation or needs. As such, you should consider whether it is appropriate in light of your own objectives, financial situation and needs prior to making any decision. You should consult a licensed financial adviser if you require advice which does take into account your personal financial circumstances.