The model Soil-Litter-Iso (SLI) calculates coupled heat and water transport in soil. It was recently implemented into the Australian land surface model CABLE, which is the land component of the Australian Community Climate and Earth System Simulator (ACCESS). Here we extended SLI to include accurate freeze-thaw processes in the soil and snow. SLI provides thence an implicit solution of the energy and water balances of soil and snow as a standalone model and within CABLE. The enhanced SLI was tested extensively against theoretical formulations, laboratory experiments, field data, and satellite retrievals. The model performed well for all experiments at wide-ranging temporal and spatial scales. SLI melts snow faster at the end of the cold season compared to observations though because there is no subgrid variability within SLI given by the implicit, coupled solution of energy and water. Combined CABLE-SLI shows very realistic dynamics and extent of permafrost on the Northern hemisphere. It illustrated, however, also the limits of possible comparisons between large-scale land surface models and local permafrost observations. CABLE-SLI exhibits the same patterns of snow depth and snow water equivalent on the Northern hemisphere compared to satellite-derived observations but quantitative comparisons depend largely on the given meteorological input fields. Further extension of CABLE-SLI with depth-dependence of soil carbon will allow realistic projections of the development of permafrost and frozen carbon stocks in a changing climate.