Total super balance: What it is, why it matters and strategies for managing it [CPD QUIZ]

01 November 2019

Stuart Sheary

Stuart is a Senior Technical Services Manager at IOOF and is a regular presenter and author of technical literature covering tax, superannuation, social security and age care.

With forward planning, clients can better manage their total super balance, which can help them to contribute more to their super and take advantage of a range of wealth-building strategies.

Since 1 July 2017, the total super balance (TSB) has become one of the most critical concepts for clients accumulating wealth in super. The TSB broadly reflects the total value of all superannuation interests and is often a determining factor in assessing eligibility to make certain super contributions and to benefit from various super measures.

With forward planning, clients can better manage their TSB, which can help them to contribute more to their super and take advantage of a range of wealth-building strategies.

What is the total super balance?

The TSB is a measurement of all superannuation interests at a point in time. It includes both accumulation and pension interests. All super measures that have a TSB threshold use 30 June of the previous financial year as the date of measurement.

The TSB should not be confused with the transfer balance cap, which limits the amount that can be transferred into a retirement phase income stream, such as an account-based pension. This cap was introduced to limit the amount of tax-free earnings on assets supporting a retirement phase income stream. A client’s transfer balance cap is currently $1,600,000.

How is the total super balance measured?

The TSB is the sum of:

  • accumulation phase interests
    • these include ordinary accumulation accounts, accruing defined benefit interests, deferred income streams and transition to retirement income streams if a specified condition of release has not been satisfied (see Income Tax Assessment Act 1997section 307.80), and are not in retirement phase.
  • retirement phase interests
    • are measured as either the transfer balance account value* or the balance of account-based pensions, term allocated pensions or transition to retirement pensions in retirement phase. Deferred benefit income streams also need to be paying a benefit before being treated as a retirement phase income stream.
    • Transition to retirement pensions that have reverted to a reversionary beneficiary on the death of the original member are also in retirement phase.
  • rollover super benefits in transit
    • for example, the amount paid by the departing fund on a rollover prior to 30 June, but not yet received by the destined fund.
  • certain SMSF Limited Recourse Borrowing Arrangement (LRBA) amounts where:
    • The LRBA is over an asset supporting the member’s interest and entered on or after 1 July 2018 and where
      • The LRBA is with an associate^ of the fund, or
      • The member has met a condition of release with a nil cashing restriction.
    • less any personal injury or structured settlement contributions
      • these are limited to the value of the contribution (excludes any subsequent growth on the contribution)

 * Transfer balance account value cannot be negative.

^ As defined in the Income Tax Assessment Act 1936 section 318.

Accumulation phase value and retirement phase value

The accumulation phase value and retirement phase value of a super interest, excluding defined benefit schemes which are included in the TSB but measured differently, is the total amount that would have been payable had the client voluntarily withdrawn their balance.

The value is calculated net of any expenses and taxes incurred by the super fund, such as capital gains tax (CGT), associated with a withdrawal. However, the amount is gross of any taxes the client may pay on receiving the benefit or withholding tax applied by the fund on payment. The net accumulation or retirement phase values may be lower than the client’s current balance.

Tip: Take care with accruing defined benefit interests

Accruing defined benefit interests may have an accumulation phase value which counts towards the TSB. Accumulation phase values are typically what the client would have received if they decided to voluntarily withdraw the funds. This may not be possible with defined benefit schemes. These funds may instead use an alternative valuation method provided in Income Tax Assessment Regulation 1997.

What it affects

Eligibility to make non-concessional contributions

Clients with a TSB of $1,600,000 or more at 30 June of the previous financial year have a non-concessional contribution (NCC) cap of nil, meaning they cannot make further NCC contributions without exceeding their NCC cap.

Utilise the bring-forward rule

Clients with a TSB of $1,400,000 or more are not able to utilise the full NCC bring-forward amount. The amount that may be contributed is outlined in Table 1.

Table 1

TSB as at 30 June previous financial year Bring-forward period Maximum allowable NCC
Below $1,400,000 3 years $300,000
$1,400,000 to less than $1,500,000 2 years $200,000
$1,500,000 to less than $1,600,000 No $100,000
$1,600,000 No Nil


Utilise carry forward concessional contributions

The carry forward concessional contribution rule allows clients to carry forward any unused concessional cap amount from previous financial years (starting from the 2018/19 financial year) up to a maximum of five previous financial years.

To utilise any previous unused concessional cap amount, a client must have a TSB of less than $500,000 at 30 June of the previous financial year.

Utilise the work test exemption

Under the one-off work test exemption, clients aged 65 to 75 (up to the 28th day of the month following their 75th birthday) with a TSB of under $300,000 can make personal and voluntary employer contributions for 12 months from the end of the financial year in which they last met the work test. Eligible clients may take advantage of this measure to:

  • implement a recontribution strategy;
  • make a personal deductible contribution to reduce taxable income; and
  • make a small business CGT contribution in the financial year following the sale of their business and who do not meet the work test.

Other issues

Other things affected by a client’s TSB include:

  • Government co-contribution – a TSB of less than $1,600,000 is necessary to be eligible for a Government co-contribution of up to $500 for personal non-concessional contributions.
  • Spouse tax offset – a contributing spouse may be eligible for a tax offset of up to $540 for making a spouse contribution. To be eligible for the offset, the spouse receiving the contribution must have a TSB of below $1,600,000.
  • Adoption of the segregated method by a self-managed super fund (SMSF) or small-APRA fund (SAF) to calculate any exempt current pension income (ECPI). The segregated method is one of two methods to calculate a fund’s ECPI, the other is the proportionate method. Under the segregated method, all earnings on assets specifically identified as supporting a retirement phase income stream are disregarded and not taxed.
    • The fund will not be able to use the segregated asset method to calculate ECPI if at any time in the year, the fund has a retirement phase interest, and all the following factors apply:
      • a person has a TSB exceeding $1,600,000 just before the start of that year.
      • the same person has a super interest in the fund at any time during the year.
      • the same person is the retirement phase recipient of a superannuation income stream just before the start of the year (from the fund or another provider).
    • More frequent reporting of transfer balance cap events under transfer balance account report (TBAR) requirements for SMSFs. If an SMSF commences an account-based pension after 1 July 2018 and had a member with a TSB of $1,000,000 or more at 30 June of the financial year prior to starting the pension, then the fund must report transfer balance cap events on a quarterly basis. Some examples of reportable events include commencing a retirement phase income stream, commutations from a retirement phase income stream and personal injury contributions. Funds are not required to report quarterly, they only need to report on an annual basis.

Contributions which are not affected by a client’s TSB

Concessional contributions, including personal deductible and salary sacrifice contributions, are not affected by a client’s TSB. Personal contributions for which no deduction is claimed, or is claimed but later denied, count towards the client’s NCC cap, which is affected by the client’s TSB. Other contributions, such as downsizer and small business CGT exempt contributions, which do not count towards the NCC cap, are not affected by the TSB.

While the client’s TSB does not restrict these contributions, the contribution itself will increase the client’s superannuation interests and will subsequently increase their TSB at 30 June.

Strategies to manage your clients TSB

Forward planning by directing contributions to a spouse with a lower balance
Managing your clients TSB can have many advantages. With forward planning, client couples can better manage their TSB for improved wealth-building opportunities. As the TSB is assessed individually, couples can benefit by equalising super benefits to reduce the likelihood of one member of a couple breaching a TSB threshold.

Super contributions splitting
Super contributions splitting over multiple years is one way to equalise benefits between couples. Under super contribution splitting rules, concessional contributions, such as employer (superannuation guarantee and salary sacrifice) and personal deductible contributions, can be rolled into a spouse’s super account generally in the financial year subsequent to the contribution. Eligible couples may split the taxable component – taxed element contributions up to the lesser of:

  • 85 per cent of concessional contributions made for that financial year.
  • the concessional contributions cap for that financial year (including any carry forward amounts).
  • the taxable (taxed) component of the client’s superannuation interest if they withdrew their entire interest from the fund.

Carry forward concessional provisions
Carry forward concessional provisions, together with super contribution splitting, provide a significant opportunity to equalise super balances. In the future, a client may accumulate up to $125,000 in carry forward concessional contributions in addition to their standard $25,000 concessional cap (assuming no change in concessional caps) for the year, meaning their concessional cap for the year is $150,000. This may provide scope to split up to $127,500 (85 per cent x $150,000) to their spouse. The first year an individual would be able to access a $150,000 total concessional contribution is the 2023/24 financial year.

Withdrawal and recontribution

Clients who have satisfied a partial or full condition of release may consider withdrawing monies from super and recontributing these amounts into their spouse’s (smaller) super account. This might be appealing to clients over the age of 60, at which time withdrawals are generally tax-free.

For example, a client who is age 60 or over may wish to commence a transition to retirement pension and draw up to 10 per cent of the fund’s balance each year and use the proceeds to make a spouse contribution. Clients who have met a full condition of release, such as retirement, have even greater scope to withdraw monies from their super fund to contribute into their spouse’s fund. Eligible spouse contributions are subject to the receiving spouse’s NCC cap.

Other issues to consider when equalising super balances include preservation of contributions and any Centrelink implications. Super in accumulation is not assessed for Centrelink purposes when the client is below their Age Pension age.

Small withdrawal can allow for an even greater contribution

Clients who have satisfied a condition of release and expect to exceed a TSB threshold, may withdraw an amount prior to 30 June to bring them below the relevant TSB threshold. For example, a client with a little over $1,600,000 might withdraw just enough to bring them below $1,600,000. This will increase their NCC cap from nil to $100,000.

With the introduction of the work test exemption and carry forward concessional cap, the benefit of taking a small amount out of super may be much greater. Qualifying for the work test exemption (via withdrawal to reduce TSB below $300,000) may, in some circumstances, allow a former small business owner to make a small business CGT exempt contribution of up $1,515,000, when they may not otherwise have been able to make the contribution due to failing the work test.

A small withdrawal that brings a client’s TSB below $500,000 may, in the future, allow the client to contribute an additional $125,000 concessional contribution under carry forward concessional contribution rules.


 The TSB is a critical concept for the many financial planners who have clients accumulating wealth in super. As a measure of a client’s total super interests, it is frequently assessed to determine eligibility to make certain super contributions. The TSB will remain a relevant concept for many years to come and any changes to super contributions rules will likely reference the TSB.

Understanding how the TSB is measured, together with strategies to manage it, will boost the super accumulation opportunities available to your clients.

Stuart Sheary, Senior Technical Manager, IOOF.




To answer the following questions, click here.

  1. A client’s total super balance at 30 June does not include:
  2. Balance of accumulation interests.
  3. Transfer balance credit for account-based income streams.
  4. Balance of account-based income streams.
  5. Accumulation phase value (APV) defined benefits.
  1. Which of the following does the TSB not affect?
  2. Non-concessional contributions.
  3. Catch-up concessional contributions.
  4. Work test exemption.
  5. Downsizer contributions.
  1. One requirement to be eligible for the spouse tax offset is that the receiving spouse must have a TSB less than:
  2. $500,000.
  3. $1,600,000.
  4. $1,000,000.
  5. $300,000.
  1. A client, age 55, with a TSB of $1,450,000 at 30 June 2019, may:
  2. Trigger the three-year bring-forward rule and contribute up to $300,000 as a NCC in the 2019/20 financial year.
  3. Not trigger the bring-forward rule but may contribute up to the NCC cap of $100,000 in the 2019/20 financial year.
  4. Trigger the two-year bring-forward rule and contribute up to $200,000 as a NCC in the 2019/20 financial year.
  5. Contribute a maximum of $150,000 in the 2019/20 financial year, bringing their TSB to $1,600,000.
  1. Which of the following does not affect the amount that may be split to a spouse’s super fund?
  2. Concessional contributions made in the financial year prior to split.
  3. Concessional contributions cap for the financial year prior to split (including any catch-up).
  4. The taxable (taxed) component of the member’s superannuation interest if they withdrew their entire interest from the fund.
  5. TSB of the spouse rolling benefits out to the receiving spouse.