Personal Transfer Balance Caps – view now on MyGov

Any super fund member who has commenced an account-based pension since 1 July 2017 (even if the pension has been entirely rolled back to accumulation phase or cashed out) can now view their updated personal transfer balance cap by using the MyGov website to access ATO online services. With the increase in the general transfer balance cap from $1.7m to $1.9m (which took effect on 1 July 2023), super fund members personal transfer balance cap will be increased in proportion to their unused transfer balance cap (also known as “transfer balance cap space”).

If a super fund member has exhausted their transfer balance cap space (that is, they have nil transfer balance cap space as at 1 July 2023), they are not entitled to any increase.

If a super fund member has exhausted 80% of the personal transfer balance cap space, then their personal transfer balance cap will be increased by 20% (the proportion of the unused space) of the $200,000 increase in the general cap.  Consequently, they will have an increase of $40,000 in their transfer balance cap space.

For super members who are yet to commence an account-based pension – the world of transfer balance accounts, transfer balance caps and unused cap spaces does not, as yet, apply to them.

For super members who have previously commenced an account-based pension but have either entirely rolled back the pension to accumulation phase or entirely cashed out the pension, the wonderful world of transfer balance accounts (and all that jazz) still applies to them.  In this situation, the transfer balance account remains open, your personal transfer balance cap is unchanged and your balance cap space is determined by the highest balance of the transfer balance account.

A transfer balance account is an account that is established and maintained by the ATO to record how much super you transfer to retirement phase (and into earnings tax exemption).  The ATO will open a transfer balance account when you first commence a pension which is entitled to the earnings tax exemption (typically, account-based pensions).  Your personal transfer balance cap will be the general transfer balance cap applying at the date the transfer balance account is opened by the ATO as increased by the portion (if any) of the dollar increase in the general cap to which you are entitled.  When you commence an account-based pension, a credit is made to your transfer balance account (equal to the opening balance of the pension account) and when you commute a pension a debit is made to your transfer balance account (equal to the amount of the commutation payment).  Movements in asset values and pension payments (other than commutations) do not affect the transfer account balance.

If you had commenced an account-based pension on or before 1 July 2017, the pension account balance immediately before 1 July 2017, is treated as the credit to the transfer account balance.

While transition to retirement pensions are a type of account pensions, only the pension account as at the time the pension becomes a retirement phase pension (ie entitled to the earnings tax exemption) is treated as a credit to the transfer balance account.  Typically, retirement phase pensions become retirement phase pensions when the pensioner member attains age 65 or is taken, for super purposes, to have retired, whichever is the earlier.

Special rules apply for pensions which are not account-based pensions, such as defined benefit pensions and non-commutable pensions.

NOTE:  This article was prepared as at August 2023.  The article has not been updated in light of subsequent developments.