Alsey
As 2025 unfolds, superannuation reforms in Australia are coming into effect, reshaping how Australians save for retirement.
These superannuation changes are aimed at strengthening the nation’s retirement income system, improving fund transparency, and ensuring fairer contributions for workers across all income levels.
Whether you’re nearing retirement, just starting your career, or advising others financially, understanding the latest superannuation updates is crucial.
Overview of Superannuation Changes in 2025
The Australian Government has introduced new rules for superannuation in 2025 as part of its broader retirement income strategy.
These adjustments are aligned with the recommendations of the Retirement Income Review and changes in economic conditions, including inflation, wage growth, and demographic shifts.
Here are the most notable changes to superannuation in 2025
- Increase in the Superannuation Guarantee (SG) rate
- Adjustments to contribution caps
- Expansion of the First Home Super Saver Scheme (FHSSS)
- Tighter regulations on underperforming funds
- New retirement income covenant requirements for funds
Superannuation Guarantee Rate Increase
As part of a phased plan to increase retirement savings, the Superannuation Guarantee (SG) rate has officially risen from 11% to 11.5% on 1 July 2025.
Employers are now required to contribute 11.5% of an employee’s ordinary time earnings into their superannuation fund, up from the previous 11%.
Future SG Rate Schedule
| Financial Year | SG Rate (%) |
|---|---|
| 2023–24 | 11.0% |
| 2024–25 | 11.0% |
| 2025–26 | 11.5% |
| 2026–27 | 12.0% |
This change boosts long-term savings but may slightly impact take-home pay negotiations and employer payroll budgets.
Updated Contribution Caps
To encourage saving while maintaining fairness, the government has also adjusted annual contribution caps. These changes reflect indexation tied to average weekly ordinary time earnings (AWOTE).
2025 Contribution Caps
| Type of Contribution | Annual Cap (2024–25) | Annual Cap (2025–26) |
|---|---|---|
| Concessional (pre-tax) | $27,500 | $30,000 |
| Non-concessional (after-tax) | $110,000 | $120,000 |
The bring-forward rule allows eligible individuals under 75 to contribute up to $360,000 over three years, up from $330,000.
First Home Super Saver Scheme (FHSSS) Expansion
From 1 July 2025, eligible Australians can now access up to $75,000 of voluntary contributions (up from $50,000) through the First Home Super Saver Scheme.
This move helps younger Australians take advantage of super tax benefits to build a housing deposit faster.
FHSSS 2025 Key Highlights
- Maximum releasable amount: $75,000
- Voluntary contributions only
- Must be a first home buyer
- Must live in the purchased home for at least 6 of the first 12 months
Stronger Regulation of Underperforming Funds
To protect retirement savings, the Australian Prudential Regulation Authority (APRA) continues to name and monitor underperforming superannuation funds. In 2025, new legislation allows the closure or forced merger of persistently underperforming funds to prevent erosion of member balances.
Members are now automatically notified if their fund fails the annual performance test and are encouraged to compare and switch using the YourSuper comparison tool on the ATO website.
New Retirement Income Covenant Requirements
Superannuation trustees are now legally required to develop and publish retirement income strategies for members nearing or in retirement.
This covenant, effective in 2025, ensures funds offer products and advice that provide stable income, flexibility, and risk management for older Australians.
Funds must now:
- Assess member demographics and retirement needs
- Offer income-focused products (e.g., annuities, drawdown strategies)
- Provide decision-making support for retirees
Who Will Be Most Affected?
1. Employees
Workers will see increased employer contributions, which helps boost their long-term savings—especially beneficial for those just starting their careers.
2. Employers
Payroll systems must be updated to reflect the new SG rate of 11.5%. Employers should prepare for further changes as the rate moves to 12% in 2026.
3. Self-Employed and Gig Workers
Although not required to contribute, self-employed individuals are encouraged to maximize concessional caps and consider voluntary contributions to benefit from tax deductions.
4. Low-Income Workers
The Low Income Superannuation Tax Offset (LISTO) remains available, ensuring low-income earners (earning up to $37,000) receive a maximum offset of $500 into their super account.
How to Prepare for These Changes
Review Your Fund’s Performance
Use the ATO’s YourSuper comparison tool to check if your fund is meeting benchmarks.
Maximize Your Contributions
Contribute before the EOFY to claim tax deductions or leverage the bring-forward rule if eligible.
Plan Early for Retirement Income
Speak with a licensed financial adviser to understand how new retirement income strategies can work for your needs.
The 2025 superannuation changes reflect Australia’s evolving retirement landscape and are designed to deliver more secure, flexible, and transparent outcomes for retirees.
From increased employer contributions to expanded access for first-home buyers and tougher regulations on underperforming funds, these updates ensure superannuation remains a vital pillar of financial security for Australians.
Take action now to review your fund, adjust contributions, and plan your retirement strategy accordingly.
FAQs
1. What is the new Superannuation Guarantee (SG) rate in 2025?
From 1 July 2025, the SG rate has increased from 11% to 11.5%, meaning employers must contribute 11.5% of eligible wages into employee super funds.
2. Can I access more funds under the First Home Super Saver Scheme in 2025?
Yes, the maximum amount of voluntary contributions that can be released under the FHSSS is now $75,000, up from $50,000, for eligible first-time home buyers.
3. What is the new concessional contribution cap for 2025–26?
The concessional (pre-tax) contribution cap has increased from $27,500 to $30,000, allowing workers to contribute more towards super while reducing their taxable income.