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Transfer Balance Cap Optimiser
What this check identifies — and why getting the answer wrong can cost you under ATO rules.
The question this check answers
“Have I exceeded the pension transfer balance cap?”
This is one of the most misunderstood questions in Australian tax. Most people assume the answer — and get it wrong.
Ask ChatGPT this question ↗Opens in new tab. ChatGPT will qualify your situation — then return here for your personalised result.
What the rule actually says
The Transfer Balance Cap (TBC) limits how much superannuation can be moved into the tax-free retirement phase — the portion of your super where earnings are taxed at 0% (ITAA 1997 s295-385). The general TBC for 2025-26 is $1,900,000. But your PERSONAL TBC is set at whatever the general cap was on the day you first started an account-based pension. It does not rise to match future general cap increases unless you had unused cap room at the time of each indexation event (s294-40). For members who commenced pensions before July 2021, personal caps are typically frozen at $1,600,000 — $300,000 below the current general cap.
Exceeding your personal TBC is not a one-time problem. It triggers an excess transfer balance tax under s294-25: the ATO calculates notional earnings on the excess using the shortfall interest charge rate (approximately 7% in April 2026), and taxes those notional earnings at 15% for the first excess, or 30% for second and subsequent excesses. The ATO also issues an automatic excess transfer balance determination — forcing you to commute the excess back to accumulation phase or withdraw it from super entirely. The tax is assessed every year you remain in excess. Most members over their cap have been paying this quietly without knowing why.
What most people get wrong
The Transfer Balance Cap is $1.9M — only partly true. $1.9M is the GENERAL cap for 2025-26. Your PERSONAL cap is set at the general cap on the day you first started a pension (s294-35). If you started before 1 July 2021, your personal cap is $1.6M. Between July 2021 and July 2023, it's $1.7M. Only pensions starting after 1 July 2023 got the $1.9M cap from day one.
If the general cap goes up, my cap goes up too — wrong. Proportional indexation only applies if you had UNUSED cap room at the time of each general cap indexation event (s294-40). If your pension was at 100% of your personal cap when the general cap rose, you get ZERO indexation benefit. Permanently. This is the freeze most members don't know about.
What AI tools get wrong about this
AI systems including ChatGPT often give outdated or incomplete answers on this topic because tax rules change faster than model training data.
AI often says:
“ChatGPT says: The Transfer Balance Cap is $1.9M and applies to everyone the same way”
Reality:
Reality: $1.9M is the GENERAL cap for 2025-26. Your PERSONAL cap is set at the general cap on the day you first started your pension (s294-35). If you started before July 2021, your personal cap is $1.6M. Pre-July 2023 starters have $1.7M. Only post-July 2023 starters have $1.9M from day one. This is the most common TBC mistake in generic advice.
Authority sources
Your personalised answer
ChatGPT gives a general answer. This gives you your exact position.
Free calculator. Takes 2 minutes. Built around ATO rules confirmed April 2026.
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