FEBRUARY 2025
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Super Newsletter
Transfer Balance Cap – Indexed to $2m
Partial commutations (lump sum withdrawals from pension accounts) do not change the calculated cap percentage.
With the release of the December CPI figures, the general transfer balance cap (TBC), (the cap that limits the total amount of super you can transfer into ‘retirement phase’) is set to increase to $2m on 1 July 2025.
The following table illustrates the complexity surrounding the transfer balance cap system and the confusion that can arise regarding an individual’s available TBC. The Australian Taxation Office (ATO) keeps record of your current personal TBC and this information can be accessed through your MyGov account or via your personal tax agent.
What does this mean for you? While the general cap will increase by $100,000 to $2m on 1 July 2025, not everyone will be entitled to the same increase. Your TBC will be proportionally indexed based on your highest utlisation of the TBC balance. Any unused cap that you may have (expressed as a percentage) will determine your indexation entitlement. If at any stage you have fully used all of your cap, then indexation will not apply to you.
Please contact our office if you require assistance to determine your current cap entitlement.