The government’s proposed tax on high super balances has sparked headlines and a fair bit of confusion. While the impact today is limited to a small group, it raises bigger questions about the future of super and how Australians should plan for retirement and legacy.
First, what is super — really?
For most Australians, super is the most tax-effective way to build retirement savings. Let’s imagine the process of purcashing a new vehicle… the parts you choose, how it’s built and maintained, it makes all difference. And the impact of these decisions becomes more apparent over time.
- The engine: These are your investments they power growth. Some people prefer the slow-and-steady hybrid; others opt for the high-octane V8 (with a few more bumps along the way).
- The safety features: Diversification, insurance, and smart planning protect you when markets swerve.
- The cost of ownership: Just like maintenance and fuel, super has fees, contribution limits, and tax implications depending on how you drive it.
- The extras: From spouse contributions to binding death nominations, there are many features you can customise to suit your goals.
With making a decision on a vehicle for the long term you want stability… so what happens when the road rules, or regulations change.
What’s changing?
From 1 July 2025, the government plans to introduce a new 15% tax on earnings from super balances over $3 million. This will apply on top of the existing 15%, making it a 30% tax on high-balance earnings.
Unlike existing super taxes, this one includes unrealised gains on balances over $3million — meaning you’ll be taxed even if the value of your assets has gone up but you haven’t sold anything.
Who does it affect?
Right now, fewer than 80,000 Australians have more than $3 million in super — around 0.5% of members. But because the cap isn’t indexed, many more could reach that threshold in time.
As Viridian Executive Advisor Ryan Scherini explains:
“We’re seeing more interest from clients in their 40s and 50s, not just those close to retirement. Even with modest returns, super balances can grow past $3 million over time. The lack of indexation makes this something everyone with a long investment horizon should be thinking about.”
What’s the strategy?
For many, the new tax is prompting fresh thinking about wealth transfer. Rather than waiting to pass on super via inheritance, some are considering early gifting especially from pension-phase accounts, which can be withdrawn tax-free.
“We’re having more conversations around intergenerational planning — whether it’s helping kids with school fees, housing, or just reducing the future tax burden,” says Scherini. “There’s growing interest in doing it sooner rather than later.”
Other advisers echo this shift:
- Gifting vs. Loans: Gifting is simple and tax-free. Loans, especially interest-free ones, can keep money in the family while offering some protection in case of divorce.
- Strategic withdrawals: Pulling money from pension-phase super avoids capital gains tax and brings total balances under the $3M cap.
But proceed with caution
These strategies sound appealing and for some, they make sense. But many advisers, are urging clients to wait before taking action.
“At this stage, we continue to work within what we know is law. Super is still one of the best investment structures for tax planning,” says Scherini.
“It’s easy to be reactive, but the legislation hasn’t passed yet. More importantly, early inheritance strategies can trigger unintended consequences like family disputes, future tax complexity, or unequal treatment among siblings.”
The bottom line?
Super is still a great vehicle, but you need to know when to change lanes. The proposed $3 million tax may only affect a small number of people today, but its broader impact is cultural: it’s changing how Australians think about legacy, liquidity, and flexibility in retirement.
Whether your goal is financial independence or helping the next generation, the smartest strategy is one built on foresight — not fear.
Ready to map your next move?
Talk to a Viridian adviser about how the proposed changes could affect you — and what actions, if any, make sense now.
About the author?
Ryan Scherini
Executive Financial Advisor, Viridian Advisory – Perth, WA
Ryan is a Certified Financial Planner® (CFP®) who brings more than a decade of deep technical knowledge and calm, strategic thinking to complex financial lives. Based in Perth, he partners with high-income professionals, pre-retirees and family groups to navigate super, SMSFs, legacy planning and wealth transfer — always with an eye on the long game. Known for his clarity and measured advice style, Ryan helps clients tune out the noise and focus
