Navigating the $3 Million Super Tax: What It Means for You

By Sunshine Coast Financial Advisor Mike Beal, Senior Financial Planner at Wealth Architects, Sunshine Coast

March 2026

Introduction — Sunshine Coast financial planner perspective

As a Sunshine Coast financial planner, I’m often asked what the new $3 million super tax (Division 296) means for retirees and wealth builders. This short guide explains the rules, shows simple examples, and outlines practical steps couples and individuals can take to reduce the impact on their retirement savings.

What is the $3 million super tax?
Division 296 adds an extra 15% tax on investment earnings attributable to any individual super balance above $3 million. That is on top of the usual tax treatment inside super.

How super is taxed now (quick summary)
– Pension phase: Up to $2 million per person in pension phase typically receives nil tax on earnings (for those over 60 and retired).  
– Super phase (above pension limits): Earnings are usually taxed at 15%. Example: $2 million in super phase earning 5% = $100,000; tax at 15% = $15,000.  
– Division 296: For balances above $3 million, the tax on earnings for that portion increases by 15% (making it 30% in total).  
– High-balance tier: For balances over $10 million, an extra 10% applies to those earnings (40% total).

Why super is still the best investment vehicle (Sunshine Coast financial planning view)
Even with these changes, super remains one of the most tax-efficient investment vehicles in Australia. Using realistic examples shows why:

Example — $6 million couple scenario
– Division 296 applies to individual balances, so a couple can each hold $3 million before the new tax applies.  
– Pension-phase tax-free amount: $2 million each (so $4 million tax-free for the couple).  
– The remaining $1 million each (if invested and earning 5%) generates $50k each; taxed at 15% = $7.5k each, or $15k combined on $6 million.  
– That’s effectively 2.5% tax on $6 million — still very low compared with most other settings.  And in fact, Div 296 would not apply under this scenario as the balances are below $3 million each.

Key strategies a Sunshine Coast financial planner might recommend
1. Equalise balances where possible  
   – Aim to even up super balances between partners to minimise the higher-taxed portion. For couples, equalising can materially reduce Division 296 exposure.

2. Recontribution strategies to reduce future tax for beneficiaries  
   – Recontributing can reduce future tax on adult children. Example: moving funds to the lower-balance spouse can both even balances and lower tax payable when the surviving spouse’s estate passes to adult children.

A real Sunshine Coast example
We recently worked with a couple in Rosemount on the Sunshine Coast with uneven super balances because one had worked in mining and the other was a stay-at-home parent. By rebalancing and using recontribution techniques, we reduced their future tax exposure and lowered potential tax liabilities for their adult children — a practical, local example of how targeted financial planning strategies can work well.

Next steps — contact your Sunshine Coast financial planner
If you want tailored strategies to minimise the impact of Division 296 on your super, email Mike Beal at mike.beal@wealtharchitects.com.au. We specialise in financial planning, retirement strategies, superannuation advice, wealth management and tax minimisation here on the Sunshine Coast.

Disclaimer: This article is general information and not personalised advice. For specific recommendations, contact a qualified Sunshine Coast financial planner or financial advisor.