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  • Transfer balance cap – defined benefit income streams

    This information is for people who are:

    • retired and receiving one or more defined benefit income streams providing a total annual income of more than $100,000
    • retired and receiving both account-based and defined benefit income streams
    • planning how they will use their accumulated super when they retire, and expect to receive a defined benefit pension or annuity
    • receiving a defined benefit income stream and start receiving, or expect to receive, a reversionary defined benefit income stream upon the death of another person
    • receiving, or may start receiving, a defined benefit income stream and are due to turn 60  years old soon.

    From 1 July 2017, the ‘defined benefit income cap’ limits the amount of tax-free income you can receive from a capped defined benefit income stream (pension or annuity).

    For 2017–18, the defined benefit income cap is $100,000 (the $1.6 million general transfer balance cap divided by 16).

    The new transfer balance cap rules apply differently to certain defined benefit income streams, known as ‘capped defined benefit income streams’. This is because amounts can't generally be removed from these income streams (this removal is known as commuting), so an individual may not be able to remove any ‘excess transfer balance’ from them.

    Find out about:

    See also:

    • Transfer balance cap (including what counts towards your cap)
    • LCG 2016/9 Superannuation reform: transfer balance cap
    • LCG 2016/10 Superannuation reform: defined benefit income streams – non-commutable, lifetime pensions and lifetime annuities
    • LCG 2017/1 Superannuation reform: defined benefit income streams – pensions or annuities paid from non-commutable, life expectancy or market-linked products
      Last modified: 17 Jan 2018QC 54353