Superannuation reforms: total superannuation balance

The Australian Taxation Office released a final version of Law Companion Guideline LCG 2016/12 on 20 March 2017. This addresses how an individual's total superannuation balance will be calculated from 30 June 2017. The guideline was previously issued in draft as LCG 2016/D12.

The concept of an individual's total superannuation balance will be important from 1 July 2017. It is part of the super reforms and will apply as a method for valuing an individual's total superannuation interests. It will be used to determine eligibility for various super concessions, including the $1.6m balance limit for making non-concessional contributions,

An individual's total superannuation balance at a particular time (e.g. 30 June 2017) is broadly the sum of:

  • the accumulation phase value of the individual's superannuation interests that are not in the retirement phase;
  • if an individual has a transfer balance account, their pension transfer balance or modified transfer balance (but not less than NIL) (Note: If an individual is the recipient of certain account-based income streams in the retirement phase and/or has made any structured settlement contributions, the individual's transfer balance is subject to modifications for the purpose of calculating their total superannuation balance); and
  • the amount of any roll-over superannuation benefit not already reflected in:
    • the individual's accumulation phase value of their superannuation interests; or
    • their transfer balance.

The total resulting from the above is then reduced by the sum of any structured settlement contributions.