An industry consultant has reminded practitioners the indexation measure to be applied to the general transfer balance cap will have implications for other elements of the superannuation system as well that are unrelated to income streams.

The general transfer balance cap will shift from $1.9 million to $2 million from 1 July and BT technical consultant Michael Tran drew attention to the link it has with other superannuation limits such as the total super balance (TSB) with reference to some specific actions available to fund members.

“The total super balance thresholds linked to the eligibility for co-contributions and the spouse contribution tax offset will also increase by $100,000 [going from $1.9 million to $2 million on 1 July],” Tran noted.

“[That means] from 1 July if a client’s TSB is greater than this figure at the most recent 30 June, which will be 30 June 2025, for the next financial year the client will not receive these benefits.

“So they won’t receive a co-contribution from the government, they won’t receive the spouse contribution tax offset in their tax return if their TSB is going to be higher than that cap.

“It actually would mean that the client would [have exceeded] their non-concessional cap as a result as well.”

Further, he took the opportunity to confirm the concessional contributions cap is not changing as its indexation measure is tied to average weekly ordinary time earnings (AWOTE) and not the consumer price index.

However, he predicted these limits would change in the near future given the AWOTE figures the Australian Bureau of Statistics published last Thursday.

“The concessional [contributions] cap will remain the same because the index number was not sufficiently large enough to cause it to increase,” he explained.

“The concessional [contributions] cap only changes when [the AWOTE statistic] reaches a multiple of 2500 and the number fell just short of that.

“However, it does look very likely that the concessional cap will increase after July 2026. So not July 2025 in terms of the next financial year, but the following financial year.”

Darin Tyson-Chan
February 26, 2025
smsmagazine.com.au

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David Forrest

Director
BEc (Acc), MBA, CPA, FFin

David has been in the Financial Services Industry for nearly 30 years. He was one of the founding Directors of the successful Financial Planning and Stockbroking Practice, Henderson Gregory Forrest, for a decade. Prior to that, he held senior roles in companies such as ING, KPMG Accountants and AMP. David was previously Chairman of OAMPS Superannuation Trustee Board and currently serves as an independent Board Director for several companies.

David’s extensive experience in all forms of superannuation, including Self Managed Super Funds (SMSF), Defined Benefit Funds, retirement funding through Account Based Pensions, stockbroking with a focus on Direct Share Investment, Taxation/Remuneration Planning, Centrelink, Aged Care and business management, equip him to advise expertly on all aspects of Financial Advice.

Those with a particular interest in superannuation/SMSFs, direct share investment, salary packaging or applying for the Centrelink Pension will find his knowledge and ability in formulating and implementing creative, logical and simple wealth creation strategies a valuable asset.

David maintains a strong personalised client service focus, providing tailored solutions for clients.

Qualifications:

Bachelor of Economics with Accounting Major (BEc (Acc))
Master of Business Administration (MBA)
Certified Practising Accountant (CPA Australia)
Graduate Diploma in Applied Finance and Investment (FFin)

Memberships:

Member of the professional association of Certified Practising Accountants (CPA Australia)

Contact:

David Forrest is an Authorised Representative of Integrity Financial (SA) Pty Ltd ABN 16 133 921 187 — AFSL No 334846

Michelle Forrest

Business Finance Manager
B Bus (Acc), CPA

Michelle’s career has spanned across the Financial Services, Retirement Living and Aged Care industries working in the private sector, not for profit and more recently with the state government for over 20 years. Her experience extends to many facets of the financial services industry, having worked in superannuation administration, technical support and financial planning practice administration.

Commencing with AMP and subsequently working in commerce and accounting roles with companies such as Brambles, Adelaide Bank Retirement Services, ECH Inc and SA Health and Wellbeing, Michelle returns to financial services after working in practice financial management at Henderson Gregory Forrest. This wide range of experience from senior accounting and management roles has provided Michelle with a strong background in business administration.

With an astute financial acumen and keen interest in business improvement strategies, Michelle ensures the smooth running of the Integrity Financial Advisory practice providing valued management support to our personalised client service focus.

Qualifications: