Forman Financial Services

Strategies to manage total super balance (TSB)

A member’s TSB at the previous 30 June impacts a number of superannuation measures as shown in the table below:

To be eligible for this measure… …the member’s total super balance at previous 30 June must be less than:
Non-concessional contributions cap $1.6 million
NCC bring-forward rule
  • $1.5 million for 2 year bring forward or
  • $1.4 million for 3 year bring forward
Using accrued carry forward concessional contributions $500,000
Work test exemption $300,000
Receiving a government co- contribution $1.6 million
Receiving a spouse contribution tax offset $1.6 million (receiving spouse’s TSB)
Using segregated assets method for calculating exempt current pension income for an SMSF $1.6 million
Where an SMSF pays a retirement phase income stream at any time during a financial year, and just prior to the financial year, a member of the fund has a retirement phase income stream (with any fund) and has a TSB of $1.6 million or more, the SMSF is prohibited from using the segregated assets method during the financial year.

The following strategies to reduce TSB before 30 June 2020 could potentially increase the amount of NCCs that can be made in 2020-21, as well as reduce the potential impact on other super measures stated above:

*  A spouse with a higher super balance may split their 2018-19 concessional contributions to their spouse’s super account in
2019-20 to reduce their 30 June 2020 TSB.
*  Members considering a ‘withdrawal and re-contribution strategy’ with a TSB over the relevant threshold may be able to make
a withdrawal to reduce their TSB before 30 June 2020. The reduced TSB could enable the withdrawal amount to be
contributed back to their super as a NCC in the new financial year.
*  Where a member’s TSB is expected to be slightly over the relevant threshold on 30 June 2020, it may be possible to make
additional withdrawals from their TTR or retirement phase income streams to bring their TSB below the threshold, in order to
maximise NCCs in the next financial year.
*  Poor investment returns from early 2020 may leave the 30 June 2020 TSB lower than expected, providing opportunities from
the measures in the table above.

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