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Capped defined benefit income streams

Total super balance modifications

Section: 20.3

From 1 July 2017, a client's total superannuation balance determines eligibility for a number of superannuation measures. See section 5 for more information.

A client's total superannuation balance includes the total value of a client's superannuation interests in both accumulation and retirement phase at the end of the previous financial year.

When determining the retirement phase value of a client's total superannuation balance, the balance of the client's transfer balance account adjusted to reflect the current value of account based income streams is measured.

Capped defined benefit income streams are included in the 'retirement phase value' of total superannuation balance as they are included in a client's transfer balance account.

The special value of a capped defined benefit income stream is credited to a client's transfer balance account either:

  • on 1 July 2017 for capped defined benefit income streams existing on 30 June 2017, or
  • on commencement for income streams commenced on or after 1 July 2017.

Therefore where a client has a capped defined benefit income stream, it is generally the commencement value for transfer balance cap purposes that counts towards a client's total superannuation balance. An exception is term allocated pensions, see below for further information.

Adjusted for term allocated pensions

A client's transfer balance account is adjusted when measuring a client's total superannuation balance where the client has a term allocated pension. The special value of a term allocated pension is adjusted for the purposes of measuring the client's total superannuation balance each 30 June.

Effectively, the account balance of the term allocated pension is used in the calculation of total superannuation balance each 30 June and any existing credits or debits in relation to a term allocated pension (other than debits for structured settlement contributions or debits in respect of non-commutable excess transfer balances) are disregarded.

Where the client holds other types of capped defined benefit income streams the transfer balance account does not get adjusted for the purposes of total superannuation balance calculations.

Last modified: Thursday, January 11, 2018