Key financial changes 2026 and beyond

Australia’s financial rules are shifting again, and many of the changes will matter for people heading into retirement or already there. Several updates from 2026 onwards aim to tighten superannuation settings, improve fairness, and ease everyday costs. From how larger super balances are taxed to what you pay at the chemist, there’s plenty to learn about.

Here’s a summary of what’s changing so you can stay ahead of it all.

Cost-of-living, health and tax relief

Cutting the cost of medicines

From 1 January 2026, the maximum co-payment for Pharmaceutical Benefits Scheme (PBS) medicines for general (non-concession) customers will has fallen from $31.60 to $25.00 per script – the lowest level in 20 years. The concessional rate remains frozen at $7.70.

Concession cards typically include the Pensioner Concession Card (PCC), the Commonwealth Seniors Health Card (CSHC) for eligible self-funded retirees, and the Low Income Health Care Card (LIHCC). These cards will continue to provide access to PBS medicines at the concessional rate of $7.70. The reduction for non-concession patients means families without concessions will see meaningful savings at the pharmacy counter.

Further personal tax cuts for every Australian taxpayer

Additional tax cuts begin on 1 July 2026. The rate on income between $18,201 and $45,000 will fall from 16% to 15%, dropping again to 14% from 1 July 2027. In combination with earlier changes, the average taxpayer will receive an annual tax cut of around $2,190 from 2027–28 onwards. (Source: budget.gov.au)

Many people assume that retirees don’t pay tax, but that’s just not the case. For anyone still working – even part-time in retirement – these reductions will help boost take-home pay and support cash-flow planning. For Age Pension recipients, this is generally taxable income, but most retirees have sufficient tax offsets to reduce or eliminate tax payable.
 

Retirement and wealth management reforms

Payday super:
Ensuring your super is paid on time

From 1 July 2026, employers must pay Superannuation Guarantee (SG) contributions each pay cycle rather than quarterly, and payments must reach your fund within seven days of payday. The Australian Tax Office’s (ATO’s) Small Business Superannuation Clearing House will also close on the same date.

This shift is expected to lead to more frequent contributions hitting member accounts, improving compounding investment returns for anyone still working and earning super because the money is in your account earning returns sooner than before this change.

What is not changing:
The Super Guarantee (SG) rate

The SG rate reached 12% on 1 July 2025, completing the long-planned phase-in. No further increases are scheduled. While steady at this point, the higher rate supports long-term retirement outcomes, particularly for younger workers and late-career employees still building their balances.

Better Targeted Superannuation Concessions (BTSC) / Division 296 tax

Tax on super will increase for those individuals with balances above $3 million.

From 1 July 2026 new tax tiers will apply to earnings linked to larger super balances, assessed using your future total super balance at the end of the financial year 30 June 2027:

• 30% on earnings associated with the portion of a balance between $3 million and $10 million
• 40% on earnings associated with balances above $10 million

Only realised earnings (gains) will be assessed, and thresholds will be indexed.

This change affects a relatively small number of Australians, but for those nearing or above the $3 million threshold, it will be important to understand how the tiered framework applies. Those with balances in this range may need to seek tailored financial advice to ensure they are responding in the best possible way.

Age Pension changes in 2026

Indexation and thresholds

The Age Pension income and asset thresholds update three times a year. The upper (disqualifying) thresholds increase on 20 March and 20 September, while the lower thresholds rise once annually on 1 July. That 1 July adjustment is often beneficial, increasing the number of people who qualify for a full Age Pension. (These changes are detailed in this article). 

The Age Pension age remains at 67, and applications can be lodged up to 13 weeks before reaching eligibility age.

Potential change:
Deeming rates may shift again in 2026

Deeming rates were unfrozen in September 2025 when they were increased to 0.75% and 2.75%. Unlike standard Age Pension indexation, deeming changes are not automatic. They are set by the Minister for Social Services based upon advice from the Australian Government Actuary and broader economic conditions.

Any movement in deeming rates influences how financial investments are assessed, and therefore affects Age Pension entitlements for those with a full or part Age-Pension and new applicants.

How to plan ahead

Staying informed about your eligibility is key to a confident retirement. Knowing how these changes might affect you means that you can work out your likely retirement income and how your superannuation investments and Age Pension combined create your income.

You can use the free Retirement Essentials Age Pension Eligibility Calculator at any time to:

• Test your current Age Pension eligibility
• See if you may be entitled to a higher fortnightly payment as Centrelink changes go live.
• Check the effect of current deeming rates upon your Age Pension eligibility and payments.
  
  

_{The information shown on this website contains general information only and does not take account your specific objectives, financial situation needs or personal circumstances. You should seek personal advice or professional financial advice, consider your own circumstances and read our Product Disclosure Statement (PDS) before making a decision about Prime Super. A copy of the PDS and Target Market Determination is available by calling 1800 675 839 or by visiting primesuper.com.au/pds}