Total Super Balance does not limit how much super you can have

How does TSB work?

TSB is a measure of the total value of superannuation benefits an individual has at a particular point in time, that is, 30 June.

A client’s TSB on 30 June is then assessed against relevant thresholds to work out their eligibility for various superannuation measures. This includes the ability to use the carry-forward concessional contributions rule, as well as determining the maximum NCC cap available in a financial year.

A summary of the key superannuation measures linked to TSB is provided below.

* Note:  amounts discussed in this row assume the client is not already in the middle of a previously triggered bring-forward rule in the financial year.

Why the confusion?

The idea that TSB places a cap on superannuation balances may have stemmed from two key factors:

1. Similarity to the Transfer Balance Cap (TBC): The TSB threshold used to determine an individual’s maximum NCC cap is aligned with the general TBC (i.e. both are set to $1.9m[1] for the 2024-25 Financial Year). This similarity has led some to assume that the TSB functions in the same way as the TBC by imposing a limit on how much can be held in superannuation—which is not the case
2. Impact on contribution eligibility: While the TSB does not directly limit the size of a client’s superannuation balance, it does influence their ability to make further contributions.

[1] The General TBC will increase to $2 million from 1 July 2025. This change will also raise the TSB threshold for making NCCs to $2 million.

How the TSB differs from TBC

It’s important to distinguish between the TSB and TBC. While both measures currently share the same $1.9m threshold, they are applied in different contexts and for different purposes.

The TBC sets a limit on how much superannuation can be transferred into the retirement phase to benefit from tax-free earnings. For clients commencing their first ever retirement phase income stream in the current financial year (2024/25), their Personal TBC would be $1.9m. The amount converted into retirement phase is a Transfer Balance Account credit which counts toward their $1.9m Personal TBC[2]. Once this cap is reached, no further amounts can be transferred into retirement phase. Exceeding the cap results in an excess transfer balance, which must be removed from retirement phase.

TSB on the other hand does not restrict how much a client can hold in superannuation in the same way as TBC. Instead, it acts as a qualification condition to determine eligibility for various contribution strategies and concessions. Most noticeably, it affects how much a client can contribute as NCC to super. For example, if a client’s TSB is equal to or greater than $1.9 million on 30 June 2024, they are not eligible to make further non-concessional contributions (NCCs) in the current year. The TSB is also used to assess eligibility for the bring-forward rule.

Although the $1.9 million figure appears in both contexts, it is crucial to be aware that they are applied differently: the TBC limits how much can be transferred into the retirement phase, while the TSB determines whether certain super contribution opportunities remain available.

[2] Unused portion of the personal TBC will be proportionally indexed on 1 July 2025. 

TSB and TBC are calculated differently

The variation in valuation methodology has contributed to some of the confusion between the TSB and the TBC.

The amount that counts toward an individual’s TBC is calculated as the sum of all transfer balance account credits minus any debits at the end of a particular day. Credits typically include events such as the commencement of a retirement phase income stream, while debits may arise from commutations, including rollovers or lump sum withdrawals from retirement phase. It’s important to note that fluctuations in the pension account balance due to investment performance are not counted against in the TBC. This means the actual balance of an ABP may differ from the value recorded against the individual’s transfer balance account. The ATO maintains this information, which can be accessed by individuals through their myGov account.

In contrast, the TSB is a much broader measurement. Among other components[3], TSB includes amounts held in both the accumulation and retirement phase. The value of retirement phase interests is calculated differently depending on the type of income stream. For account-based income streams, the adjusted value which is typically the same value as its account balance as at 30 June

[3] See page 15 of the FirstTech 2024–25 Pocket Guide

Consider TSB first then the TBC

When working with clients who have complex superannuation arrangements, recommending NCCs can be a challenging task.

A potential way which may ease this complexity is to first assess the client’s TSB before considering their TBC.

Below is a case study of Xin which helps demonstrate this.

Other Frequently Asked Questions

What if a NCC pushes the client’s TSB over the threshold

There’s no requirement to limit the amount of NCCs in order to keep the TSB below the relevant threshold. For example, if a client is eligible to make a NCC of $120,000 in the 2024–25 financial year, they may contribute the full amount, even if doing so causes their TSB to exceed the $1.9 million threshold.

Does TSB impact a client’s concessional contributions cap

The TSB does not directly impact a client’s concessional contributions cap. Individuals are able to make a concessional  contribution regardless of their TSB subject to the usual contribution eligibility rules. However, TSB can affect their ability to utilise carry forward unused concessional contributions.

To be eligible to make a concessional contribution utilising carry forward unused concessional contributions, their  TSB must be less than $500,000 at 30 June of the financial year prior to the year they make the contribution. This applies even if the concessional contributions cause the client’s super balance to exceed this $500,000 threshold.