For many Australians, one of the biggest hidden consequences of inheriting a reversionary ABP is its impact on future non-concessional contribution (NCC) eligibility.
Reversionary pension NCC eligibility can be affected long before a beneficiary reaches the 12-month Transfer Balance Cap deadline. For many Australians, inheriting a reversionary pension increases their Total Super Balance (TSB), which may reduce future contribution opportunities.
Why This Happens:
Even before the pension counts toward your TBC, it may already increase your TSB.
Why TSB Matters:
Your TSB at 30 June may determine:
- NCC cap access
- Bring-forward eligibility
- Carry-forward concessional use
- Government incentives
Example:
As outlined in Sophie’s case:
A combined balance of $2.32 million at 30 June eliminated NCC eligibility under a $2.1 million threshold.
Planning Opportunity:
Beneficiaries may wish to consider:
- Lump sum withdrawals
- Recontribution strategies
- Pension restructuring before 30 June
Contact Us
Have you inherited a reversionary pension? Contact us here to discuss how it may affect your future super contribution opportunities.
Disclaimer and Warning
The information above is of a general nature only. It should not be used as a source to make financial decisions. It’s also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status. We recommend that if you are looking for advice on this matter, you should contact us.