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TBC set to increase to $2m in July
The ATO has officially announced that the transfer balance cap will increase to $2 million on 1 July.
The ATO has said the transfer balance cap is set to increase by $100,000 from $1.9 million while the defined benefit income cap (DBIC) will increase to $125,000 (from $118,750) for the 2025–26 income year.
This increase has flow-through impacts for individuals with a personal TBC. The ATO said these individuals would be entitled to an increase of their cap if they have not previously been at or exceeded it.
Their increase will be a proportion of the $100,000 and would depend on their unused cap space. Individuals starting a pension for the first time on or after 1 July 2025 will be entitled to a personal TBC of $2 million. Individuals can view their personal TBC in ATO online services through myGov.
The regulator stated it would 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 said it encouraged funds and advisers to report all TBC events when they occur and as early as possible before the 1 July 2025 indexation start date.
Indexation of the general TBC also has flow-through consequences for total super balance. TSB influences an individual’s non-concessional contributions cap, non-concessional bring forward arrangement, and eligibility for spouse tax offset and co-contributions.
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