Total Superannuation Balance: When it applies and what is included

If you have an SMSF, your administrator or accountant should keep a track of this value.

APV also includes deferred superannuation income streams, transition-to-retirement income streams and superannuation income streams that do not comply with the pension or annuity standards.

The ATO calculates RPV using your transfer balance account as at the end of the previous financial year.

For TSB purposes account-based super income streams need to have their value adjusted to be included in retirement phase value at their current value. Modifications to the transfer balance amount may also be needed if there are structured settlement contributions to the superannuation fund.

What is the Total Superannuation Balance used for?

TSB is used to measure your eligibility for a number of important super measures. These are:

• The carry forward of unused concessional contributions cap amounts
• The non-concessional contributions cap and eligibility for the bring forward of your non-concessional contributions cap amounts
• Government co-contributions
• The tax offset for spouse contributions.

For SMSFs and small APRA funds your members’ TSB determines whether or not you can use the segregated method to calculate exempt current pension income (ECPI).

Concessional contributions carry forward rule

Since 1 July 2018, you are able to carry forward any unused concessional contributions cap amounts for five years as long as your superannuation balance in the previous financial year is under $500,000. The first year in which you could increase your concessional contributions cap by the unused amount was 2019–20. The concessional contributions cap increased to $27,500 on 1 July 2021.

Non-concessional contributions cap and non-concessional contributions cap bring forward

The non-concessional contributions cap is now $110,000 a year if your total super balance in the previous financial year is less than or equal to the transfer balance cap ($1.6 million in 2020–21 increasing to $1.7 million from 2021–22).

If you aged under 67 you are now able to access the bring-forward rule that allows you to bring forward three years of non-concessional contributions. (Previously restricted to people aged under 65, eligibility was extended to people aged 65 and 66 for non-concessional contributions made on or after 1 July 2020 with the passage of the Treasury Laws Amendment (More Flexible Superannuation) Bill 2020 on 17 June 2021.) The size of the contributions you can make will depend on the size of your TSB.

The ATO explains it as follows:

From 1 July 2021

The amount of the non-concessional contributions cap you can bring forward is either:

• Three times the annual non-concessional contributions cap over three years (that is, $330,000) if your total super balance on 30 June of the previous financial year is less than $1.48 million
• Two times the annual cap over two years (that is, $220,000) if your total super balance on 30 June of the previous financial year is above $1.48 million and less than $1.59 million
• Nil ($0) if your total super balance is $1.59 million or above.

Government co-contributions

You also have a TSB limit equivalent to the general transfer balance cap to meet one of the eligibility criteria for the government’s co-contribution superannuation scheme, whereby the government will match after-tax superannuation contributions up to an amount of $500 per year if you also meet certain income eligibility requirements.

Tax offset for spouse contributions

If you make superannuation contributions on behalf of your spouse of at least $3,000 you may be eligible for a tax offset of up to $540. Your spouse’s TSB must be under the transfer balance cap level immediately before the start of the financial year in which the contribution was made.

SMSFs and Exempt Current Pension Income (ECPI)

SMSFs with more than one member and where one or more of those members are in retirement phase need to calculate ECPI each year. The segregated method can be used if the assets supporting the pension are known and are separated from the assets in accumulation phase.

However, if any fund member has a total super balance over the general transfer balance cap level immediately before the start of the relevant income year and is receiving a retirement phase income stream from any source (including the SMSF or another super provider), the SMSF cannot use the segregated method and must use the proportionate method to calculate ECPI. The proportionate method requires an actuarial certificate to determine which proportion of the SMSF’s total assets is supporting the pension.

What’s the difference between the total superannuation balance and the transfer balance cap?

TSB is the total of your super interests in both accumulation and retirement phase. It is used to determine your eligibility for certain super measures during accumulation phase and, in retirement, to determine whether you have reached your transfer balance cap.

The total superannuation limit is the maximum amount you can have in super to be eligible for certain superannuation measures in accumulation phase. It is equivalent to the transfer balance cap for many measures but not all.

The ATO uses the following example to highlight the differences and how they are used.

How do I calculate or check my total super balance?

If you are in retirement phase, your TSB is on your transfer balance account, which you can access via the myGov website.

If you are in accumulation phase, your super fund can tell you your TSB (remember to add all the values if you have multiple super funds). And if you have an SMSF, your platform administrator should keep a tally of the amount on your account.

Remember that your total super balance is the sum of your accumulation and retirement phase accounts value if you have both.

Total superannuation balance reporting

Currently total super balance reporting is done annually via the member’s contribution statement (MCS) for APRA funds or an SMSF annual return for SMSF members.

If the amount reported on the MCS does not accurately reflect the accumulation phase value (APV) or retirement phase value (RPV) funds can report the new amount to the ATO via the transfer balance account report (TBAR). This information would then override the MCS or the SMSF annual return for TSB purposes only.

The ATO has asked that these TBAR notifications be lodged before or with the MCS or SMSF annual return and has said that the additional reporting is optional and at the discretion of funds.

For SMSFs, the closing account balance on the SMSF annual return is often greater than the APV or the RPV because it does not include the disposal costs required to cease an investment interest.

The ATO says additional reporting is required for SMSFs when the inclusion of these asset disposal costs would result in a TSB above one of the thresholds that limit eligibility for certain superannuation measures.

Also, SMSF members with a capped defined benefit income stream and either an accumulation interest or a market-linked retirement phase interest in the SMSF who need to submit a TBAR must provide one for every account they have in the SMSF.

An SMSF member’s TSB is also used to determine how frequently an SMSF needs to report transfer balance events. The ATO says that when all members of an SMSF have total super balances of less than $1 million they need only report transfer balance events annually. However, when even one member has a total super balance of $1 million or more on 30 June before the first member starts their income stream, they need to report transfer balance events within 28 days after the end of the quarter in which the event occurs.

Another ATO example illustrates this.