Transfer balance cap
Transfer balance account
9.2 Transfer balance account
A transfer balanced account is a record of all transactions that count towards a member's personal transfer balance cap (PTBC) for certain types of superannuation income streams. The transfer balance cap for retirement phase income streams commenced at $1.6 million on 1 July 2017, increased to $ 1.7 million on 1 July 2021 and further indexed by $200,000 $1.9 million on 1 July 2023.
The balance of the transfer balance account will indicate whether a member has exceeded their personal transfer balance cap. Members will have only one transfer balance account for all their transactions until their death.
When does a transfer balance account commence?
A transfer balance account commences when:
- a member commences their first retirement phase income stream after 1 July 2017
- a member already has a retirement phase income stream on and after 1 July 2017
Transfers into and out of retirement phase are generally referred to as credit or debit events. The transfer balance account keeps a record of all transactions as this will determine whether a member has exceeded their personal transfer balance cap.
A member continues to have a transfer balance account even if the member subsequently ceases to be a retirement phase recipient of a superannuation income stream. A member only ceases to have a transfer balance account when they die.
A transition to retirement income stream (TRIS) is not considered a transfer to retirement phase unless a superannuation income stream benefit is currently payable from it, and the member:
- is 65 years old or older, or
- has met a relevant condition of release with a nil cashing restriction (retirement, terminal medical condition, permanent incapacity) and has notified the superannuation provider for the TRIS of that fact, or
- receives TRIS as a reversionary beneficiary
From 1 July 2017, superannuation income stream providers are taxed on earnings from assets supporting a TRIS that is not in retirement phase.
The age pension (or other types of government assistance payments) and a pension received from a foreign superannuation fund are not included in a member's transfer balance account because such pensions are not superannuation income streams.
This technical resource is intended for the use of financial advisers only. It is current as at the date of publication but may be subject to change. This publication has been prepared without taking into account a potential investor's objectives, financial situation, needs or objectives. Before making a recommendation based on this material, you should consider its appropriateness based on the client's objectives, financial situation and needs. Rainmaker Group is not a registered tax agent under the Tax Agent Services Act 2009. Your client should be referred to a registered tax agent before relying on information published herein that may impact their tax obligations, liabilities or entitlements.
Last modified: Monday, June 19, 2023