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Transfer balance cap

Transfer balance account

Section: 19.5

The transfer balance account tracks the net amounts transferred to retirement phase income streams. The client's transfer balance account is then measured against the client's personal transfer balance cap, to determine whether the client has exceeded their personal cap or is able to commence further retirement phase income streams.

A transfer balance account is created for a client by the Australian Taxation Office at the earliest of:

  • 1 July 2017, if a client was in receipt of a retirement phase income stream on 30 June 2017
  • the time a client commences their first retirement phase income stream on or after 1 July 2017
  • the time a client's income stream enters the retirement phase for the first time. A transition to retirement income stream will enter the retirement phase at the earlier of the beneficiary notifying the trustee of meeting a specified condition of release, or on the beneficiary's 65th birthday. See section 12.1 for more information on retirement phase income streams.

A transfer balance account will generally cease upon the member's death.

A minor child's transfer balance account, created upon receipt of a death benefit income stream from a deceased parent, generally ceases at the age of 25 when they are forced to commute their death benefit income stream.

The transfer balance account works like a general ledger, with amounts being credited and debited depending on a client's circumstances. Broadly, amounts are credited to the transfer balance account when retirement phase income streams are commenced, and amounts are debited from the transfer balance account when amounts are commuted and withdrawn or rolled over from retirement phase income streams.

Importantly, the value of a credit or debit does not change over time with indexation or market movements.

Last modified: Wednesday, July 24, 2019