Total super balance vs Transfer balance cap explained

In this guide

Total superannuation balance (TSB)
Super measures affected by your TSB
The transfer balance cap (TBC)
Common questions about total super balance and the transfer balance cap
The bottom line

Anybody who retired recently and started a super pension is probably familiar with the transfer balance cap and what it is. Yet there is still a lot of confusion around the differences between:

The total superannuation balance (TSB) which is the total balance a person has in super and is used to determine a fund member’s eligibility for certain super measures, and
The transfer balance cap (TBC) which places a limit on the amount a person can transfer into tax-free retirement income streams.

Total superannuation balance (TSB)

Let’s start with total super balance. This is a fairly easy concept to understand. It’s usually the total amount of money you have in your super at any one time. The ATO measures your TSB each 30 June to determine which super measures you are eligible to use in the following financial year.

You can find your TSB via your myGov account using the linked ATO service, or by calling the ATO super line on 13 10 20. If you’re in a large fund, your new 30 June TSB generally becomes available around 12 July each year. If you have a self-managed super fund (SMSF), the TSB will not be updated until you have submitted your SMSF annual return.

The ATO says your TSB equals the sum of the following:

The accumulation phase value of your super interests that are not in the retirement phase
The retirement phase value of your super interests
The amount of each rollover super benefit not already reflected in the accumulation phase value or the retirement phase value (that is, rollovers in transit between super funds on 30 June)
In certain circumstances, the outstanding balance belonging to a limited recourse borrowing arrangement (LRBA) in an SMSF (or other regulated super fund with less than five members) you entered into from 1 July 2018, if either:
- The LRBA is with an associate of the fund
- You have satisfied a condition of release with a nil cashing restriction.

Your TSB matters when determining your eligibility for a range of features in the super system.

Super measures affected by your TSB

Your TSB is relevant when working out whether you are eligible for six super measures. These are:

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Carry-forward (catch-up) concessional contributions
Non-concessional contribution cap and bring-forward contributions
Work test exemption
Co-contribution
Spouse tax offset
Segregated asset method for calculating exempt current pension income (only relevant for SMSFs)

For some of these measures, your TSB must be below the general transfer balance cap (TBC) for the year. This is where the confusion between the two terms comes from. In 2025–26 the general transfer balance cap is $2 million.

The carry-forward concessional contribution measure allows you to contribute more than the standard annual concessional cap in one year without generating excessive contributions. To do this, you use carried forward cap ‘space’ you didn’t take advantage of in prior years. To be eligible for this measure, your TSB needs to be below $500,000 on 30 June of the financial year prior to the year you are using the carry forward.

Learn more about carry-forward contributions.

Your non-concessional contribution cap is zero for the financial year if your TSB was higher than the general transfer balance cap on 30 June of the prior financial year. This means that if your balance on 30 June 2025 was $2 million or more, your non-concessional contribution cap is zero in 2025–26.

Learn what happens if you exceed your contribution caps.

A high TSB also affects how you can use bring-forward contributions. The bring-forward measure allows you to contribute up to three years’ annual non-concessional cap in one year by ‘bringing forward’ contribution cap amounts from future years. The current annual non-concessional cap is $120,000, which means you can contribute up the $360,000 in one year.

If your TSB on 30 June is more than $240,000 lower than the general transfer balance cap for the following financial year, you have access to the ‘standard’ three-year bring-forward period in that year. A higher TSB means the rule is modified or not available.

Learn more about the bring-forward rule.

To use the work test exemption in the year after retirement and make personal tax-deductible contributions, your TSB on the prior 30 June must be below $300,000.

Read about the work test exemption.

To receive a government co-contribution in return for contributions you make during a financial year your TSB must be below the general transfer balance cap for that year on the prior 30 June, and to receive a tax offset for contributions you make to your spouse’s account, their TSB must be below the general transfer balance cap for the year you made the contribution on the prior 30 June.

Need to know

If you have an SMSF you need to be aware of the TSB of all members as it can impact how to calculate exempt current pension income (ECPI).

Graeme Colley says if a member has a TSB of at least $1.6 million immediately before the start of the relevant income year, and that member is receiving a retirement phase income stream from any fund (not necessarily the SMSF), as well as the fund having at least one retirement phase income stream at any time of the year, then the fund is required to use the proportionate method to determine ECPI and an actuarial certificate is required.

“The only exception is where the fund was wholly in retirement phase for a financial year that commenced on or after 1 July 2021, which allows the SMSF to use the segregated method,” Colley says.

Just to confuse matters, this $1.6 million TSB ECPI cap has remained the same despite subsequent increases to the general transfer balance cap, which stands at $2 million from 1 July 2025.

Learn more on what SMSF trustees need to know about ECPI.

The transfer balance cap (TBC)

The transfer balance cap is a little more complex, but the good news is you don’t need to worry about it too much if you’re still in accumulation phase. It only comes into play as you approach or enter retirement.

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The TBC is the limit on the amount you can transfer from accumulation phase to support a retirement income stream. It started at $1.6 million on 1 July 2017 and is indexed in increments of $100,000 to keep pace with inflation. The cap was last increased, to $2 million, on 1 July 2025.

The cap was introduced because income earned on assets supporting a retirement phase pension is tax-free. The TBC means that retirees can’t invest amounts considered excessive in this tax-free environment.

A transfer balance account is established for you when you first start a retirement income stream. It’s a record of all the events that count towards your TBC. When you start a retirement income stream, its value is added to your account. When you make a commutation from the income stream (lump sum withdrawal or transfer back to the accumulation phase), the amount of the commutation is subtracted.

Good to know

It’s important to remember that the amount in your transfer balance account and your total super balance are calculated differently.

Your transfer balance account is calculated on amounts that you transfer into retirement phase to support a pension or annuity over the course of your lifetime.

What is, and isn’t, included in my transfer balance cap?

If you start a transition-to-retirement pension or income stream (TTR or TRIS) before you retire, it will not be included in your transfer balance account. This also applies to any amount you have in an accumulation account.

The balance of your TRIS is added to your transfer balance account and starts to count towards your TBC on the day it becomes a retirement phase income stream. This conversion happens automatically when you turn 65 if your TRIS remains open, and is also triggered when you let your super fund know you have met the retirement condition of release. If you want more control over the timing of additions to your tranfer balance account, such as waiting for a scheduled increase to the transfer balance cap, you can rollover the balance of your TRIS back to an accumulation account before you turn 65 and before informing your fund that you have left work.

The amount supporting a retirement income stream is counted against your TBC by being added to your transfer balance account at the time you commence the pension. Pension payments and investment earnings do not have any effect on the account.

You can have more than one pension, but the balance of your transfer balance account cannot exceed your TBC otherwise a tax penalty will apply until you transfer the excess amount back into an accumulation account or remove it from super entirely.

Once you have started a retirement income stream, you have a personal transfer balance cap that may not be the same as the general cap. When the general cap is indexed, you are entitled only to a proportion of the indexation that corresponds to the amount of the cap you have not already used.

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Learn more about the transfer balance cap.

Common questions about total super balance and the transfer balance cap

The difference between total super balance and the transfer balance cap can be confusing, so we’ve addressed some common questions. Many of these questions come from our quarterly member Q&A webinars.

Note: The thresholds mentioned in some of these questions may have since change.

Check the current super rates and thresholds.

Q: Is there a cap on the total balance (accumulation and income funds combined) one can have in super once one has set up an income stream pension? What is the rule for a 67-year-old?

A: This is an interesting question because we did have some proposed laws that were announced by the now Labor government, which I’ll take you through. But the key issue is to consider that there are no real limits imposed on the total balances that can be held in your super funds. There is no specific limit that says you can’t have any more than $5 million, $10 million, etc. inside superannuation. Just for interest sakes, in 2022, the largest balance held within a single SMSF was above $540 million. Now, I know you’re asking about individual limits, but no matter how many members there are in the SMSF, maximum of six, you’re looking at member balances of at least $100 million each.

So, no there are no real limits imposed on the total balances that can be held inside your fund. Now, the proposal that I referred to before was floated by the Labour government about putting in place a total superannuation saving limit. It was a discussion paper; it was an idea. They initially proposed, I think it was approximately $5 million, but that never came in. The proposed change to apply a total super-saving limit never came in.

What they did instead was put in place the new rules from 1 July 2025 around the additional tax on earnings when balances are above $3 million, referred to as Division 296 tax. That doesn’t start until 1 July 2025. Again, no limits imposed on your total balances.

Learn more about the proposed Division 296 tax.

There are, of course, limits imposed on what we can hold in the retirement phase of super. The phase of super, the pension phase, where all the earnings on those assets in pension phase are tax-free, and that’s referred to as the transfer balance cap. That sits somewhere between $1.6 and $1.9 million, depending on your own personal circumstances. Again, no limit on balances, but as you’ll see here, a limit on the amount that can be held in the tax-free retirement phase. The other thing we need to talk about, as I said before, were those 1 July 2025 changes, which apply an additional 15% tax on earnings that relate to member balances above $3 million. Again, only from 1 July 2025 and referred to as Div 296 tax. It’s just something another limit to be aware of.

There are further limits imposed on making non-concessional contributions. These are your after-tax contributions to super. Once your total super balance, which is looked at the prior 30th of June, once that balance is above the general transfer balance cap, you’re restricted to making non-concessional contributions. You’re restricted to add further after-tax contributions. Any after-tax contribution or non-concessional contribution you make when your total super balance is not below that general transfer balance cap, that will be deemed to be an excess contribution. Again, not a restriction on how much we can hold, but a restriction on getting more money in to our funders after tax contributions.

The other thing we need to keep in mind is the restriction on making those types of contributions once we reach 75. Once we reach 75 plus 28 days, we can’t make non-concessional contributions.

To cut a long story short, there are no actual restrictions imposed on how much you can hold in your super savings, but there are certainly limits on the tax benefits and limits around making further contributions once we hit some of those balanced benchmarks.

You can look at some of our articles on this topic on our website.

Q: I am interested in the apparent loophole that allows a pension fund to go above the applicable cap. In my case $1.7 million. On the ATO website it states that if your Total Super Balance on 30 June, the previous year is less than $1.48 million then non-concessional contributions for the first year can be $330,000. Thus, effectively making your new total super balance $1.81 million i.e. greater than the $1.7m cap. Can you explain any pitfalls in using this strategy to maximise funds in pension phase?

A: Remember, there’s a key difference between what we call our total super balance and what is referred to as our transfer balance cap. Although you refer to it as a loophole, it’s not really a loophole. It’s just the way that the legislations interact with each other.

It is the confusing terminology which is used. Let’s look at these. Remember that our total super balance refers to all balances held in all our super funds. Whether it be in accumulation phase or pension phase, it’s a balance representing everything that you have inside superannuation. It’s used to determine your eligibility to make contributions. It’s used to determine your eligibility to make use of the three-year non-concessional contribution. It’s there to determine your eligibility for the unused concessional contribution rules. The total balance is a measure that looks at your eligibility to do other things, to make contributions, etc.

That’s different to your transfer balance cap. That’s the limit you’re referred to about moving money into pension phase, into that tax-free retirement phase. Now, the transfer balance cap only limits what we can use to start, to commence a pension.

Once we’ve started a pension, those pensions can grow. They can increase in value, and sometimes well above that transfer balance cap. Currently, the $1.9 million, it’s grown from the $1.7 million to the $1.9 million. In some cases, you’ll see pensions which have balances well above that. If we go back to your specific query, which it says on the ATO website, it says that if your total super balance is below a certain level, you can put in contributions.

We’re looking here at your eligibility to make contributions is based on your total super balance. The transfer balance cap is the limit imposed on what we then move from contribution phase, from accumulation phase, into retirement phase. That’s the limit we spoke about of the current $1.9 million. But again, the limit is imposed on what we can move into pension phase. Those pensions can grow.

If we summarise that or look at that in a different way, there aren’t any real limits imposed on the total balances that can be held in your super savings. That total super balance restriction is on putting money if you have maximised your contributions, you can’t put more money in because of the total balance, it doesn’t stop you from then having growth in your balances.

In fact, in 2022, it was reported that the largest balance held in the self-managed fund was above $540 million. It doesn’t restrict your balances. It’s restricting you from doing certain things. We then looked at the limits imposed on moving balances into retirement phase, which we looked at around the transfer balance cap. That currently sits anywhere between that $1.6 million and $1.9 million.

Now, again, keep in mind that from 1 July 2025, we’ve got that change, that division 296 coming in, which is going to apply tax a bit differently if you’ve got more than $3 million inside super. It just applies an additional 15% tax on earnings relevant to your balances above $3 million.

I want to be clear here that the ATO’s comments aren’t necessarily a loophole, but what they’re saying is if you’ve got close to those limits, you need to think about how much you can put into superannuation. But once that money is in your pension, once you’ve moved money from the accumulation phase into pension phase, those pension balances can grow and grow and grow, and they can grow well above the transfer balance account balance. They can go well above that $1.9 million. Earnings and losses on a pension don’t affect your transfer balance account.

The transfer balance cap only limits what you can move or commence a pension with. Again, it’s not really a loophole. It’s just the way that the legislation works and those different terminologies need to be applied.

Have a look at those three articles on the page there around transfer balance cap, total balance, and then the difference between the two of them. There are three separate articles which will certainly help you with that particular topic. I hope that helps. It is a bit confusing, but to summarise that, there’s no real loophole. It’s the way you’re looking at what you’re doing, making a contribution versus then moving money into pension phase. Again, I hope that helped.

The bottom line

Although the same limit applies to both your transfer balance cap amount and your total super balance in some instances, they are not the same thing. It’s important to remember how they are calculated to avoid extra tax and remain aware of the features of the super system you are entitled to.

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