From 1 July 2017 a new concept – Total Superannuation Balance – was introduced.
An individual's Total Superannuation Balance (TSB) is the new measure for valuing an individual's total superannuation interests and will be used to determine the following:
- the ability to use the new carry forward provisions which take effect from 1 July 2018;
- the ability to make additional non-concessional contributions;
- eligibility for the Government Co-contribution; and
- eligiblity for the tax offset for spouse contributions.
Additionally, the TSB will also be used when determining whether or not a Self Managed Super Fund (SMSF) can use the "segregated" method for tax purposes.
So if there is at least one member of an SMSF who has a total super balance that exceeds $1.6 million and that member was also receiving a retirement pension, the SMSF may not use the segregated accounting method. That member does not have to be receiving a pension from the SMSF specifically. The retirement income can be from any source.
The calculation for TSB is always done as at 30 June each financial year. This then determines what strategies the individual can employ for the next financial year.
What is included in Total Super Balance Calculations?
Total Super Balance is the sum of any superannuation interests the individual holds. This includes:
- accumulation interests and transition to retirement pensions 'not in retirement phase';
- retirement interests – including defined benefit pensions – that make up the individual's Modified Transfer Balance Cap; and
- any roll-over amounts not already reflected in an accumulation interest.
The Total Super Balance measure is not to be confused with the $1.6m Transfer Balance Cap. An individual's Total Super Balance relates to ALL superannuation interests whereas the Transfer Balance Cap only relates to retirement interests. There is no specific 'cap' for TSB, rather it determines the availability of particular strategies that relate to that individual for the next financial year.
Feel free to contact your Morgans Adviser or your local Morgans office if you would like more information on Total Super Balance.
Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents ("Morgans") do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.