Question 1

• Once in pension phase and the TSB (Total Super Balance) at the time was $1.6 million, if I redirect rental income to accumulation phase up to $27,500/yr, does my TSB increase to $1.9 million? I am 64 years old.

Firstly, it’s important to distinguish between your ‘Total Super Balance’ and ‘Transfer Balance Cap’.

Total Super Balance (TSB)

Your total super balance is the sum of the total value of your accumulation and pension phase balances as at June 30 each year.

Your TSB is used to determine whether you are eligible for several super-related measures for the following financial year.

Most importantly, your total super balance must be under $1,900,000 as at June 30, 2023 in order for you to be eligible to make after-tax (non-concessional) contributions.

Concessional contributions, such as SG, salary sacrifice and personal tax-deductible contributions, can still be made regardless of your TSB up until the age of 75.

The only date relevant for your TSB is June 30 each year. Unlike the Transfer Balance Cap, everyone has the same TSB limit. So, for this financial year, everyone’s TSB limit is $1,900,000.

Transfer Balance Cap (TBC)

The TBC limits total transfers you can make from superannuation accumulation accounts to superannuation income streams/pensions.

This is a lifetime limit, however, indexation applies.

The general TBC is currently $1,900,000. However, as soon as you start a super pension you will create a personal TBC that only applies to you. This then determines how much indexation is applies to your personal TBC.

As an example, let’s say you started a pension for $1,200,000 when the general TBC was $1,600,000.

As you used 75 per cent of the TBC at that time, only 25 per cent of indexation will apply to your personal TBC, in this case $75,000 ($300,000 x 25 per cent).

Your personal TBC would now be $1,675,000 ($1,600,000 + $75,000).

Anyone who has not started a super pension previously would be entitled to the full $1,900,000 TBC.

There are complexities around the above so I would recommend seeking personalised financial advice.

Question 2

• I had some super but due to inactivity, my super account was closed by the fund. The balance was refunded to me through the ATO. How can I open another super account? And who can I open it with? I’m 53, offering a personal service and also have a bit of investment income.

Yes, you can, and probably should, open a new super fund to build your retirement savings back up.

Most super funds these days are ‘public offer’ which will allow anyone to join.

It sounds like you just need something pretty simple for your super. When looking at options consider:

1. A fund with a strong long-term net (after fees) performance
2. Consider whether you wish to hold any insurance within super. It’s often convenient and cost effective to have insurance within super, but bear in mind the premiums will be deducted from your super balance
3. Any other service offered as part of your membership, such as education or advice, that you would value.

You can use the government’s YourSuper comparison tool to compare MySuper (default) products.

Or there are a number of non-government sites that provide comparisons such as those listed below:

• Canstar
• Chant West
• Morningstar
• SelectingSuper
• SuperRatings

Question 3

• Hi, could you please explain the asset limits for a single person on the aged pension. What is the minimum amount where the full pension is paid and what is the amount where the pension cuts out. With inflation eating into my savings, does Centrelink adjust the pension as my savings dwindle away?

The below are the current assets test limits for a single person and a couple.

It’s different depending on whether you own your own home or you are renting. If you are a home owner, the home does not get included in the asset test.

If you have assets below the ‘Assets free area’ you may be eligible for the full age pension.

If you have more assets than the ‘Assets limit’ you receive no age pension.  If you have total assets in between you receive a part age pension.

These thresholds were increased from July 1, 2023 as follows:

If you are on a part age pension, then yes, as you start using more of your own money and reducing your balance your part age pension will increase until you reach the maximum payment.

The good news is that the age pension is also indexed twice a year so that it keeps up with inflation and retains its purchasing power.

Craig Sankey is a licensed financial adviser and head of Technical Services & Advice Enablement at Industry Fund Services

Disclaimer: The responses provided are general in nature, and while they are prompted by the questions asked, they have been prepared without taking into consideration all your objectives, financial situation or needs.

Before relying on any of the information, please ensure that you consider the appropriateness of the information for your objectives, financial situation or needs. To the extent that it is permitted by law, no responsibility for errors or omissions is accepted by IFS and its representatives.

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