July Update | The New Financial Year Changes, the Closing Window on Capital Gains & a Health Card Worth a Second Look.
Message from the Team
Several changes took effect on 1 July — covering super, income tax, and retirement caps. Some apply automatically, but others carry real implications, particularly for those nearing retirement, running a business, or holding a larger super balance. This month we explain what changed, and what it means for you.
Feature Insight: What Actually Changed on 1 July
Four changes took effect with the new financial year. Most ask nothing of you directly, yet each one quietly shapes a decision you may be in the middle of making.
The transfer balance cap has risen to $2.1 million
This is the amount of super you can move into a retirement-phase pension, where investment earnings are taxed at 0% rather than 15%. It has increased by $100,000, from $2.0 million to $2.1 million. This is the change most relevant to those in or approaching retirement — the tax-free treatment applies once your super is in a retirement-phase pension, generally available from age 60 once you have retired, and automatically from age 65. The cap also interacts closely with estate planning, so if retirement is on the horizon it is worth modelling properly rather than estimating.
Payday Super has begun
Employers must now pay super at the same time as wages, reaching the fund within seven business days of each payday, rather than quarterly. For employees this is a welcome change: your contributions begin working for you sooner, and any shortfall is far easier to notice.
For business owners, it is a more significant shift — and the change to penalties matters more than the change to timing. Under the old system, a late payment could generally be caught up without lasting consequence. That flexibility has gone. If a fund does not receive the money within seven business days, the super guarantee charge now applies — carrying daily interest, an administrative uplift, and further penalties of between 25% and 50%. The charge itself is now tax-deductible; the penalties and interest are not. If you run payroll, it is worth confirming your systems are ready for super to be paid every pay run, and our accounting team is always happy to look over your setup.
Division 296 is now in effect
An additional tax now applies to the earnings on the portion of a super balance above $3 million, lifting the rate on that portion to 30%, with a further tier taking balances above $10 million to 40%. Importantly, the final version applies only to realised earnings — the much-debated tax on unrealised gains was dropped — and both thresholds are indexed. It affects relatively few people, but if your balance is above the threshold, or approaching it, the decisions that shape your position are best made now. Self-managed funds in particular have a one-off opportunity to reset asset cost bases, though it must be elected. If this may apply to you, it is worth a conversation before the year gets away.
A small cut to the second tax bracket
The rate on income between $18,201 and $45,000 has dropped from 16% to 15%, with a further cut to 14% legislated for next year. It flows through automatically, so there is nothing to do — the benefit is capped at around $268 a year. Also worth noting for your next return: from the 2026–27 year, a new flat $1,000 work-related deduction can be claimed with no receipts. For most people who work from home or use a car for work, though, keeping receipts and claiming actual expenses will still come out ahead, since those alone often exceed $1,000.
The Lakeside Lens: A Closing Window on the Capital Gains Discount
Most of the attention on the Budget's capital gains changes has focused on what they mean in the long run. Less discussed is the fact that they create a genuine timing decision over the next eighteen months.
Here is the point that matters. From 1 July 2027, the 50% capital gains discount is replaced by a new minimum 30% tax on gains. Until then, the discount still applies. For anyone weighing up the sale of an appreciating asset — an investment property, or a large share or ETF holding — the window in which the current, more generous treatment applies closes on 30 June 2027.
This does not mean rushing to sell. A sale should always be driven by your own circumstances first, not by tax alone. But if a sale was already on the horizon, the timing of it now carries real weight, and for larger gains the difference between the two regimes can be substantial.
It is also worth reviewing whether a growth asset is better held personally or within another structure, given the same change applies broadly across individuals and trusts.
If a significant sale is a possibility for you before 2027, it is worth a conversation well before the window closes, rather than in the final months.
The Annual Reset: One Considered Look Across Everything
Most of the money that quietly slips away over the years does not come from a poor decision. It comes from a good decision that was never looked at again — the insurance still set to a salary from three roles ago, the super nomination that lapsed without anyone noticing, the loan that was competitive in 2021 and quietly is not by 2026. Nothing went wrong; nothing was ever checked.
The start of a financial year is a natural moment to change that. Not an overhaul, simply a considered look across the parts that matter, asking one question of each: is this still set up the way it should be? Four areas are worth the look.
Super. Is your balance where you would expect, and still invested in a way that suits your stage of life? Are your contributions making use of the caps available across the year? And the one most people overlook — is your beneficiary nomination current and valid? Super does not automatically pass under your Will, and a lapsed nomination is one of the more common and costly oversights we see.
Insurance. Your income is your most significant asset, yet income protection, life, TPD and trauma cover are among the most commonly set-and-forgotten arrangements we come across. Does your benefit still match your income? Is your waiting period still appropriate? Are you doubling up, or under-covered, across super and personal policies? Sometimes a review finds you are paying for cover you no longer need.
Loan structure. Rates rose through the first half of the year, widening the gap between an efficient loan and an inefficient one. Is your offset working as hard as it can, and has your rate been reviewed against the market recently, or has it quietly drifted?
Estate documents. Is your Will current, and does it still reflect your circumstances? Are your powers of attorney in place? These are the documents everyone postpones, and the ones that spare a family considerable stress at the most difficult time.
None of these sits in isolation. Your super shapes your estate plan, your debt interacts with your tax, and your insurance depends on your cashflow — which is why reviewing them together is what makes the exercise worthwhile. If something you review raises a question you would rather not answer alone, that is exactly what we are here for.
The Commonwealth Seniors Health Card: Worth a Second Look, Even If You Assume You Don't Qualify
Many self-funded retirees never apply for the Commonwealth Seniors Health Card, on the reasonable assumption that a substantial super balance rules them out. It is a common and costly misunderstanding, because the card has no asset test at all.
Eligibility rests solely on an income test: your adjusted taxable income, plus a deemed amount of income from any account-based (pension-phase) super. Your home, your savings, your share portfolio and — importantly — any super still in accumulation phase are simply not counted.
That last point is where it becomes interesting. Because accumulation-phase super is invisible to the test, two retirees with identical wealth can have very different eligibility, depending purely on how their super is arranged. A couple with a large balance can, in many cases, sit comfortably under the income threshold, which is currently $161,768 in adjusted taxable income for a couple, and $101,105 for a single (you must also have reached Age Pension age, currently 67).
The trap worth knowing about is the mirror image of the usual advice. Moving more super into pension phase is often the right move for tax, since earnings there are untaxed — but it also increases the income deemed for this card, and can quietly tip a retiree over the threshold. For a healthy couple the card may be worth only a few hundred dollars a year, but if serious illness arrives, the value climbs sharply through the PBS safety net and Medicare benefits. It can be worth far more than the tax saved by shifting the money.
The interaction between pension phase, deemed income and this card is precisely the kind of detail that is easy to miss and worth checking. If you are at or approaching Age Pension age, it is worth a conversation before assuming you do not qualify.
Client Story of the Month
Not every claim is straightforward. Sometimes the real value of advice is in what happens after a claim is first knocked back.
A client came to us with an income protection claim that had stalled. Following a difficult period in his life that had left him unable to work, he had lodged a claim — only for his insurer to assess it as partially payable, arguing his loss of income did not fully meet their measure. As far as the insurer was concerned, that was the end of it.
We did not think the insurer's position was right. With his agreement, we took the matter further, ultimately escalating it to the Australian Financial Complaints Authority (AFCA). We presented the case for why the claim should be paid in full, and the determination came back in his favour.
The outcome was an income protection benefit of $170,000 — money he would not have received had the original decision gone unchallenged. It is a reminder that a claim decision is not always the final word. Insurers do not always get it right the first time, and knowing how a policy should respond, and being willing to push when it matters, can make a very real difference. If you ever face a claim that has been declined or reduced, it is worth a second opinion before you accept it.
The Whole Picture, in One Place
Much of what we have covered this month comes back to a single idea: the whole picture matters more than any one part of it. That idea is exactly what shaped Wealth Locker — the secure online vault Ross built to bring your entire financial world into one organised place. Your insurance, superannuation, loan details, Will and estate documents, all held together and available whenever you need them.
A new financial year is a natural moment to put it to work. With everything in one place, nothing slips through the cracks across a full year — and, in its quietest and most valuable way, it means the people you love would find everything together at the very moment it would be hardest to go searching.
Wealth Locker is free to our community for the rest of 2026. If you have set it up but not yet added much, this is a good month to change that, and we are happy to help populate it with what we already hold on file.
Supporting Connor's Run
Away from the numbers this month, there is a cause close to our part of the world that we wanted to share.
Connor's Run is Australia's largest event for paediatric brain cancer — the single biggest cancer killer of young people. It is held each September in memory of Robert Connor Dawes, a Brighton Grammar student and rower who passed away from brain cancer at just 18. The original run followed a route he took himself, from Sandringham along the Yarra, and it has since grown into a much-loved community event, raising funds for world-class research, care and support for young people and their families.
This year the cause is a little closer to home. Our own Josh Duscher is Team Captain for the Old Brighton Grammarians team, and will be taking on the run in September.
The event is held on Sunday 13 September, or can be completed your own way, any day across the month, with distances of 18.8km, 9.6km or 3km to suit all levels. If you would like to take part, sponsor Josh, or simply learn more, you can find everything at connorsrun.com. It is a genuinely worthwhile cause, and a local one — and we would love to see our community get behind it.
Starting the Year Well
The best time to get ahead of a financial year is at the start of it, before another twelve months quietly repeats the patterns of the last. Whether it is a considered reset across your whole position, preparing your payroll for Payday Super, putting a super strategy in place for the year ahead, or simply confirming that everything is still working the way it should, we are here to help.
If any of this raises a question for your own situation, please do not hesitate to reach out. We would be glad to talk it through — this financial year, and beyond.
Warm regards,
The Lakeside Financial Team