Super SA Triple S is the default super fund for most South Australian Public Sector employees, including doctors, nurses, police and teachers. As a constitutionally protected fund, it benefits from significant taxation advantages but also comes with significant complexities. These complexities when navigated correctly, can lead to large taxation savings, but if navigated poorly, could lead to undesirable outcomes.
Salary sacrifice
Perhaps the greatest advantage to those eligible to contribute to Triple S is there is generally no limit on how much you can salary sacrifice annually into your fund. This means you could salary sacrifice all of your annual public salary if you had the desire and means to do so.
Super SA Triple S has announced a new lifetime limit cap of $1,935,000 for its Triple S account holders, effective 1 July 2026 (up from $1,865,000). This increase means members can now salary sacrifice up to a further $70,000 to their fund over their career – providing additional taxation savings.
If you are a Triple S member and not salary sacrificing into your fund, particularly as you approach retirement, it is a strategy you should strongly consider and seek advice on.
Example:
- Mary earns $200,000 in her public role. She salary sacrifices $50,000 pa into Triple S, saving her $12,800 pa in tax on those contributions.
- If instead Mary salary sacrificed $150,000 pa into Triple S, this could save her $30,850 pa.
- There is generally no annual limit on how much public income you can salary sacrifice to Triple S. Whether you are earning $70,000 or $500,000, you could salary sacrifice as much or as little as you choose, up to the lifetime limit of $1,935,000, potentially saving you tens of thousands of dollars in tax each year.
Budget changes
The 2026 Federal Budget proposed sweeping reform to Australia’s tax system, most notably targeting negative gearing, the capital gains discount and trusts. In most situations this will increase the tax individuals pay on their investment income outside of super, meaning the legislation has made super comparatively much more attractive.
There are several strategies individuals can consider to reduce the impact of these tax changes, but perhaps the most significant is to make better use of super through concessional (salary sacrifice) and non-concessional (post-tax) contributions.
While most Australians are limited to the $32,500 concessional cap from 1 July 2026, Triple S members have a unique advantage in that you can salary sacrifice all of your public income. Therefore, these budget changes significantly increase your advantage and it is something that all SA public sector workers should explore to both combat these additional taxes and set yourself up for retirement.
Division 296 tax on those with more than $3m
Super accounts are generally taxed up to 15% on earnings of the fund and 0% when entering the pension phase.
From 1 July 2026, a new tax called Division 296 will be introduced, effectively taxing up to an additional 15% on the earnings for individuals whose total super balance exceeds $3m. Earnings are considered income and realised gains (gains that occur when an investment is sold). It is important to note that the tax only applies to the proportion above $3m, not the total balance. Therefore, if you had $4m, 25% of your fund ($1m/$4m) would be subject to this additional tax on earnings.
How does Division 296 impact Triple S?
Firstly, a key characteristic of the Triple S fund is its tax treatment. Unlike other super funds, tax is generally deferred and paid only upon withdrawal or rollover. By deferring when the tax is paid, Triple S balances will always be overstated, as tax has yet to be deducted. When you roll out of Triple S, up to 15% tax is paid up to the $1,935,000 cap and up to 47% beyond that.
Therefore, a person with $1,000,000 in Triple S may only really have $850,000 (15% less) when they access their super. While this can be a good thing as it allows you to have investment earnings on a larger account balance, it also makes your account balance appear larger in respect to other super caps, including Division 296’s $3 million limit, meaning you could potentially pay more tax.
How are earnings in Triple S calculated?
Unlike most super funds, Triple S earnings will not be reported at an individual level based on income and realised gains. Instead, for Division 296 purposes, it has been proposed that Triple S will be treated like a Defined Benefit. A Defined Benefit is a super fund that is not based on investment earnings but instead based on a set formula which usually relates to the member’s salary and years of service.
For Defined Benefit funds, including Triple S members to whom Division 296 tax may apply, 82.5% of the increase in value (excluding any contributions or withdrawals) over the course of the year will be considered earnings for Division 296 purposes.
Example:
- Mary has $1m in Triple S and this grows to $1.1m by earnings alone (assuming no contributions or withdrawals).
- 5% of the $100,000 increase in the fund is counted as earnings from a Division 296 perspective and thus there are $82,500 of Division 296 earnings.
- If Mary had a total of $4m across her various super funds, she would then pay 15% tax (Division 296) on 25% (the proportion above $3m) of the total earnings across those funds. Therefore, the tax attributed to Triple S’ share of this would be 15% x 25% x $82,500 = $3,094 tax payable. Mary would also pay Division 296 tax for the earnings in her other super funds.
Super SA has other schemes beyond Triple S. The Pension Scheme, SA Ambulance and Lump Sum Schemes will likely follow the above 82.5% formula approach. There are some schemes such as the Judges’ Pension Scheme and Parliamentary Super Scheme that are likely to be exempt. The Flexible Rollover Product, Income Stream and Super SA Select Schemes will likely be based on actual earnings, of which Super SA will provide an individual calculation for you.
Should I roll out of Triple S?
Triple S members are now allowed to partially roll their balances out to other super funds, even if keeping the account open to contribute.
This can have several benefits including:
- Obtaining access to franking credits and the capital gains discount within super (not available within Triple S)
- Delaying when you reach the lifetime cap by having investment earnings (which form part of the cap) accrue in another super fund
- Potentially reduced Division 296 super tax
- Potentially better performing investment options
A common strategy is to salary sacrifice extensively to Super SA Triple S, whilst doing a partial rollover each year to another super fund to take advantage of the above benefits.
Please note rolling out of Triple S should not be taken lightly due to the deferred exit taxes involved and you should seek professional advice to understand the positive and negative consequences of such a change.
Summary
In summary, there are lots of opportunities to minimise your tax with Super SA Triple S by making additional salary sacrifice contributions, particularly with the Federal Budget changes that increase tax on non-super investments. There are however complexities and opportunities involved for those who may reach the $1,935,000 lifetime cap one day and for those who collectively may have more than $3m in super.
Everyone’s circumstances are different and the above is extremely complicated, so it is important to seek advice to determine the best strategy for you. If you are interested in reviewing your Super SA strategy, please contact your advisor or a member of the William Buck team.
