The major changes to superannuation in Australia for 2025 include updated withdrawal rules, tax changes, contribution increases, and reforms to better target superannuation concessions:

1. Withdrawal Rules (effective from October 10, 2025):

• Australians aged 55 and above can make partial super withdrawals under specific conditions with improved transparency.
• Withdrawals require valid hardship reasons and identity verification.
• Taxation of lump-sum withdrawals now varies by age and income. Withdrawals by those aged 60+ remain tax-free, but those 55-59 face partial taxes.
• Annual withdrawal limits align with life expectancy, and super funds must report monthly to the ATO to limit misuse and protect sustainability.

2. Super Guarantee and Contributions (effective July 1, 2025):

• The Super Guarantee rate increases from 11.5% to 12% of before-tax earnings.
• Superannuation contributions will now be paid on government-funded paid parental leave.
• The Transfer Balance Cap rises from $1.9 million to $2 million, allowing more funds into the tax-free retirement phase.

3. Targeted Concessions and Taxation:

• A second tax threshold on super earnings is introduced: 30% tax on balances over $3 million and 40% on balances exceeding $10 million, both indexed to inflation.
• The government dropped plans to tax unrealised capital gains on super.
• The low-income superannuation tax offset (LISTO) increases from $500 to $810, and eligibility expands from $37,000 to $45,000 income starting July 2027, benefiting more low-income earners.

4. Implementation and Compliance:

• These reforms come with stronger compliance, reporting, and transparency requirements to sustain retirement savings and tax fairness.
• The changes aim to balance benefits for retirees, improve retirement income sustainability, and ensure fairness in tax concessions predominantly affecting the wealthiest super fund holders while aiding low-income workers.

These reforms represent a substantial reshaping of the superannuation system to ensure long-term retirement security, better tax targeting, and expanded protections and benefits for Australian workers and retirees.