Superannuation Balance Increase From 1 July 2023

The general Transfer Balance Cap (TBC) will increase by $200,000 on 1 July 2023 to $1.9 million. This is the amount of money you can potentially hold in a tax-free retirement account. The TBC is indexed to the consumer price index each December.

The TBC applies individually. If your transfer balance account reached $1.7 million or more at any point before 1 July 2023, your TBC after 1 July 2023 will remain at $1.7 million. If the highest amount in your account was between $1 and $1.7 million, then your cap is proportionally indexed based on the highest ever balance your transfer balance account reached.

That is, the ATO will look at the highest amount your transfer balance account has ever been. Then, they will apply indexation to the unused cap amount.

For example…

If you started a retirement income stream valued at $1,275,000 on 1 October 2022 and this was the highest point your account reached before 1 July 2023, then your unused cap is $425,000 ($1.7-$1.275 million). This unused cap amount is used to work out your unused cap percentage ($425k/$1.7 million = 25%). The unused cap percentage is then applied to the indexation increase ($200k*25% = $50k) to create your new TBC of $1,750,000.

But don’t worry, you don’t have to calculate this yourself. You can see your personal transfer balance cap, available cap space, and transfer balance account transactions online through the ATO link in myGov.

The caps on the contributions you can make into superannuation however, will remain the same. That is, $27,500 for concessional contributions and $110,00 for non-concessional contributions. The contribution caps are linked to December’s average weekly ordinary time earnings figures.

For more on the transfer balance cap increase, click here!

If you would like assistance with superannuation balances and retirement, get in touch with one of our advisers.

This is general advice only and has not been prepared with your situation and needs in mind. For individual and personalised advice, we highly recommend that you seek out proper professional advice from your advisers.