These regulation changes reform the treatment of the transfer balance cap for successor fund transfers and will ensure individuals with a capped defined benefit income stream (CDBIS) are not adversely impacted in the event of a successor fund transfer between superannuation funds.
Previously, the balance of the transfer balance account for some recipients of CDBIS was unintentionally affected by the original income stream being treated as ceasing and a new one beginning.
From 6 July 2024, for the purposes of the individual’s transfer balance account, an income stream that is a CDBIS just before the successor fund transfer will have the credit value equal to the debit value of the CDBIS that arises as part of the successor fund transfer.
The changes will be applied retrospectively from 1 July 2017.
The ATO will be working closely with impacted superannuation funds to adjust the transfer balance accounts of recipients of CDBISs adversely affected.
Affected individuals should contact their superannuation fund if they have questions about their transfer balance account.
