General transfer balance cap will be indexed on 1 July 2025

Indexation of the general transfer balance cap ('TBC') will occur on 1 July 2025. This cap will increase by $100,000 from $1.9 million to $2 million.

Editor: The general TBC amount is used for a number of purposes, including to determine the total capital amount that can be transferred to the retirement (pension) phase, and to determine eligibility for making non-concessional contributions.

This increase has flow through impacts for individuals who have started a retirement phase pension, as they will be entitled to an increase to their personal TBC if they have not previously been at, or exceeded, their cap.

Individuals starting a pension for the first time on or after 1 July 2025 will be entitled to a personal TBC of $2 million.

The ATO will calculate an individual's personal TBC based on the information reported to and processed by the ATO. To help individuals have a clear understanding of their position, the ATO encourages funds to report all 'TBC events' when they occur and as early as possible before the 1 July 2025 indexation start date.

Editor: Indexation of the general TBC also has flow through consequences for the Total Super Balance ('TSB'). The TSB influences an individual's non-concessional contributions cap, non-concessional bring forward arrangement, and eligibility for spouse tax offset and co-contributions.

Please note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information's applicability to their particular circumstances.