General Transfer Balance Cap Increases to $2.0 Million

The general transfer balance cap will increase to $2.0 million for the 2025–2026 income year, following the release of the December 2024 Consumer Price Index (CPI) figures. This change represents a $100,000 increase from the previous cap.

What Is the Transfer Balance Cap?

The transfer balance cap sets a lifetime limit on how much superannuation you can move into retirement phase income streams, such as account‑based pensions. Once super enters the retirement phase, earnings on those amounts are generally tax‑free, and withdrawals made after age 60 are usually tax‑free as well.

The government introduced the cap in 2017 to limit access to superannuation tax concessions, promote fairness, and support the long‑term sustainability of the super system.

How the Cap Is Indexed

Unlike contribution caps, the general transfer balance cap does not increase in line with wages. Instead, it adjusts annually based on CPI, and only increases in $100,000 increments.

Since its introduction, the cap has increased as follows:

• $1.6 million from 2017 to 2021
• $1.7 million from 2021 to 2023
• $1.9 million from 2023 to 2024
• $2.0 million from 2025–2026

Your Personal Transfer Balance Cap

Your personal transfer balance cap applies when you start a retirement phase income stream for the first time. At that point, your personal cap matches the general transfer balance cap in force on that date.

If you commence a retirement phase income stream on or after 1 July 2025, your personal transfer balance cap will be $2.0 million.

If you started a retirement phase income stream before that date, your personal cap will fall between $1.6 million and $1.9 million, depending on when you first commenced. If you did not use your full personal cap at the time, you may receive a proportional increase to your cap from 1 July 2025.

What Happens If You Exceed Your Cap?

If you exceed your personal transfer balance cap, you must remove the excess amount from the retirement phase. You can do this by:

• Withdrawing the excess as a lump sum, or
• Transferring it back into an accumulation account

You must also pay excess transfer balance tax on the amount above your cap. The tax office will generally notify you and issue an excess transfer balance determination if you exceed your limit.

Tracking Your Transfer Balance Cap

You can monitor your personal transfer balance cap and transfer balance account through online services. These records track all credits and debits that affect your balance and help you identify any excess amounts early.

Why This Increase Matters

The increase to $2.0 million provides greater flexibility for people approaching or entering retirement. Understanding how the general and personal transfer balance caps apply helps you manage your superannuation effectively and avoid unnecessary tax consequences.