Govt confirms DB inclusion in $3m super cap

Mike Taylor

Managing Editor/Publisher, Financial Newswire

9 May 2023

Despite the pushback by accountants and others the Government has followed through on its Budget commitment for a $3 million cap on superannuation tax concessions.

The Government said that from 1 July, 2025, earnings on balances exceeding $3 million would attract an increased concession tax rate of 30% while earnings on balances below $3 million would continue to be taxed at the concessional rate of 15%.

In doing so, it confirmed that defined benefit interests would be appropriately valued and would have earnings taxed under the measure in a similar way to other interests to ensure commensurate treatment.

It said the additional tax on earnings “imposed by this modest change” is only expected to affect around 80,000 people from 2025-26, “or approximately 0.5% of Australians with a superannuation account”.