From 1 July 2017, a lifetime cap will apply to the total amount of super that an individual can hold in the retirement phase tax free. This new cap is called the ‘general transfer balance cap’.
A snapshot of the new cap
- The cap is $1.6 million for each individual for the 2017-18 financial year.
- It applies to defined benefit pensions too—but in a different way.
- It includes the total amount you have in any of your retirement income accounts.
- The ATO manages the cap, so it includes money across all your pension funds (if you have more than one).
- The cap is for retirees only—and doesn’t include transition to retirement accounts.