Transfer Balance Cap (TBC)

Total Super Balance (TSB)

Your total superannuation balance (TSB) is the sum of all your accumulation and pension phase balances as at June 30 each year. It must be under $1,900,000 as at June 30, 2024 if you want to make personal after-tax (non-concessional) contributions. You can still make concessional contributions (SG, salary sacrifice and personal tax-deductible contributions) regardless of your TSB up until the age of 75.

Transfer balance account

Your transfer balance account records how much super you have transferred into retirement phase, less any amounts in retirement phase you have taken as lump sums.

Your transfer balance account is credited with money transferred into a retirement phase account and debited when you commute or remove money from retirement phase.

The balance of your transfer balance account is compared with your personal transfer balance cap to determine whether you have exceeded your personal Transfer Balance Cap (TBC), your available cap space and if you’re entitled to proportional indexation.

Transfer Balance Cap (TBC)

A transfer balance cap is a lifetime limit on the amount you can transfer into one or more retirement phase accounts which are tax free.

When you start a retirement phase income stream, you will have a personal TBC equal to the general transfer balance cap at that time.

Starting on 1 July 2021, the general transfer balance cap of $1,600,000 has increased (indexed) in $100,000 increments to $1,900,000. Next year it will be $2,000,000 for those who have never started a super pension.

Everyone will create a personal TBC when they start a superannuation pension which applies only to them. The general TBC is currently $1,900,000 and anyone who has never started a super pension would be entitled to a $1,900,000 TBC.

In this situation, the ATO uses information reported by your funds to calculate your personal transfer balance cap by:

• identifying the highest ever balance in your transfer balance account
• using that to work out the unused cap percentage of your transfer balance account
• multiplying your unused cap percentage by the general transfer balance cap index increase.

For example,

If you purchased a pension for $1,200,000 when the TBC was $1,600,000 in 2021, you would have used 75% of the TBC ($1,200,000/$1,600,000), so 25% of the unused (new) TBC is available – (($1,900,000-$1,600,000) x 25%=$75,000). Your personal TBC would now be $1,675,000 ($1,600,000 + $75,000).