What are Total Superannuation Balances (TSB) and why does the ATO need to keep track of them?
A member’s TSB is the total sum of their balances held within both retirement phase income streams and accumulation accounts across all superannuation funds.
As mentioned in our article “Getting Ready for TBAR Reporting”, the Total Superannuation Balance of each member of an SMSF where at least one member has a retirement phase income stream is used to determine the frequency of TBAR lodgements.
In addition to TBAR lodgement frequency, with the implementation of the Transfer Balance Cap and the need to limit and monitor the amount of funds a member has in retirement phase; the TSB is also necessary in determining eligibility for:
- Carry Forward Concessional Contributions – from 1 July 2019 if a member’s TSB is less than $500,000 at the end of 30 June of the previous financial year they may be able to increase their concessional contributions cap. To do so they must have unused concessional contributions cap space for one or more of the previous five years, starting from 2018–19. The first time members will be required to know their total superannuation balance for this carry forward measure will be the 30 June 2019 and the first year they will be able to access unused concessional contributions will be the 2019 – 2020 financial year.
- Non-Concessional Contributions Cap and the Bring Forward Rule – from 1 July 2017, if on 30 June of the previous financial year, a member’s TSB is below $1.6 million they may be eligible for a non-concessional contributions cap above zero. They may also be eligible to bring forward their non-concessional contributions cap of two or three times the annual non-concessional cap depending on their total superannuation balance (provided they meet current Work Test eligibility requirements).
The following table provides an overview of how the bring forward rule works in these situations:
|Total superannuation balance on 30 June 2018||Non-concessional contributions cap for the first year||Bring-forward period|
|Less than $1.4 million||$300,000||3 years|
|$1.4 million to less than $1.5 million||$200,000||2 years|
|$1.5 million to less than $1.6 million||$100,000||No bring-forward period, general NCC cap applies|
|$1.6 million or more||Nil||n/a|
- Government Co-Contribution – from 1 July 2017, in addition to the existing eligibility requirements, members will be eligible for the government co-contribution in a financial year if
- their non-concessional contributions do not exceed the non-concessional contributions cap for the relevant financial year
- on 30 June of the previous financial year, their total superannuation balance is less than the Transfer Balance Cap ($1.6 million for 2017–18) that financial year.
- Spouse tax offset – from 2017–18, there are additional eligibility requirements to meet to be entitled to the tax offset:
- the spouse receiving the contribution cannot contribute more than their annual non-concessional contributions cap for the relevant year
- the receiving spouse must have a total superannuation balance less than the general transfer balance cap ($1.6 million for 2017–18) immediately before the start of the financial year in which the contribution was made, see Tax offset for super contributions on behalf of your spouse.
- Segregated asset method – from 2017–18, SMSFs and regulated super funds with fewer than five members (small-APRA funds), will not be able to use the segregated asset method to calculate exempt current pension income if at any time in the year, the fund has a retirement phase interest, and all the following apply
- a member has a total superannuation balance exceeding $1.6 million just before the start of that year
- the same member has a super interest in the fund at any time during the year
- the same member is the retirement phase recipient of a superannuation income stream just before the start of the year (from the same fund or another provider).
How can your clients determine their Total Superannuation Balance?
Clients can login to their MyGov account to access their ATO dashboard. From this dashboard, they have the ability of seeing their active superannuation balances.
Alternatively, the clients’ accountant for their personal taxes can request this information from the ATO. However, this process can take a few months as it needs to be requested, rather than simply being visible in the accountant’s ATO Portal login.
As the tracking of TSB is still in its early days, the information held by the ATO may not be complete as they rely on reports from the various superannuation providers. If your client is confident they have an account which is not visible in MyGov, this may be worth checking to ensure no amounts are missed.
If you have any questions about TSB or TBAR reporting and how it impacts you or your clients, give us a call today on 1800 24 23 22.
Written by Millinda Cobban, SMSFcentral Client Manager.