What is TBC, and how will it change after July 2026?
TBC stands for the Transfer Balance Cap, a rule in the Australian retirement system. TBC will limit the amount of funds a retired person can transfer from his/her superannuation account to a tax-free retirement pension account.
The ATO requires that when a person in Australia retires, their superannuation savings can be converted into a retirement income stream, with earnings treated as tax-free.
This Transfer Balance Cap sets the maximum amount that a retiree can move into the tax-free retirement account.
How much was TBC over the years?
The Transfer Balance Cap, which can be transferred to a tax-free retirement account, was $1.6 million from 2017, the year the rule took effect. This amount remained the same until 2021, and then was increased to $1.7 million from 2022 to 2023.
It had been increasing since then, in line with inflation. In 2025-26, it was $2.0 million, and from July 2026, the amount is set to increase by another $100,000 to $2.1 million.
Who will benefit from this change and who will not?
If you are someone who starts the retirement-phase pension on or after July 2026, you are fully eligible for this TBC change and can transfer up to $2.1 million from your super account to your tax-free retirement pension account.
For someone who has already started their retirement phase before 2026, the personal TBC will increase in proportion to how much savings are used and how much remains.
And if someone has completely used the personal TBC before 1st July 2026, they will not benefit from this TBC increase.
As the TBC changes, accounting firms might advise their clients on more tax-efficient pension plan strategies, and employees need to be made aware of the new rules and tax obligations.
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