Transfer Balance Cap Increase

However, only members who have not yet commenced a pension will be eligible for the full increase with a new cap of $1.7M. 

If you have an already established pension, you will receive a proportional increase based on the unused portion of the cap. 

If you have a Transfer Balance Account** (TBA) of $1.6M or more, therefore having 0% of unused cap, your cap will remain at $1.6M. 

If you have a TBA less than the current cap, you will receive a proportional increase.  

For example:

A member with a Transfer Balance Account of $800,000 (50% unused cap) will receive an increase of $50k. 

This increase is designed to keep the cap in line with inflation. 

A major side effect in creating a non-standardised cap can lead to confusion and the increased need for continuous accounting.  We expect that the ATO will provide the technology to allow accountants and advisers the ability to manage this cap more effectively going forward. 

^{*  Transfer Balance Cap is the limit of monies that can be transferred into a ‘tax free’ pension. 
** Transfer Balance Account is a sub-account used to manage the Transfer Balance Cap – it is not the value of your pension.}