From 1 July 2026, the general Transfer Balance Cap (TBC) is expected to increase from $2.0 million to $2.1 million.
At the same time, the annual non-concessional contribution (NCC) cap is also likely to increase from $120,000 to $130,000.
These changes are not yet formally confirmed. However, based on the established indexation formulas, there is a strong expectation that both increases will occur.
For many q4 financial clients — particularly business owners and high-income professionals building wealth inside super — this is welcome news.
A quick refresher: What is the Transfer Balance Cap?
The Transfer Balance Cap is the lifetime limit on how much of your super you can move into retirement phase, where investment earnings are taxed at 0%.
Anything above your personal cap must remain in accumulation phase, where earnings are generally taxed at up to 15%.
Each person has their own cap. If you have already started a pension, your ability to benefit from future increases depends on how much of your cap you have previously used.
Why this matters
For several years, we have often worked towards around $2.0 million per person in super, where appropriate. That figure aligned with the maximum that could move into a tax-free pension environment.
If the cap increases to $2.1 million, the goalposts shift.
That extra $100,000 means:
- More money can sit in a 0% tax environment
- Greater flexibility around when and how you start pensions
- More incentive to continue building super balances
$100,000 may not sound transformative. But invested over many years in a tax-free environment, it can materially improve retirement outcomes.
Small shifts in legislation can create meaningful long-term advantages.
The flow-on effect: Higher contribution limits
If the NCC cap increases to $130,000, eligible clients may be able to contribute up to $390,000 in one financial year using the bring-forward rule.
The bring-forward rule allows you to bring forward up to three years of non-concessional contributions at once. In simple terms, if the annual cap is $130,000, you may be able to contribute:
$130,000 × 3 years = $390,000 in a single year
This can be particularly powerful after a business sale, inheritance, or other liquidity event where capital becomes available at once.
This creates planning opportunities for:
- Business owners with uneven income or sale proceeds
- Clients receiving inheritances
- Those restructuring assets into super
- Couples looking to equalise super balances
Eligibility depends on your age and your total super balance at 30 June of the previous financial year. Timing matters.
What this could look like in real life (an example)
Sarah is 60 and owns a professional services firm. She plans to sell within the next 12–18 months.
Her super balance is currently $1.6 million. When the business sells, she expects surplus capital to become available after clearing debt and setting aside personal reserves.
If the Transfer Balance Cap increases to $2.1 million:
• She has additional room to move money into a 0% tax retirement pension
• This creates flexibility in how much she can shift into a tax-free environment
If the non-concessional contribution cap increases to $130,000, she may be able to contribute up to $390,000 in one year using the bring-forward rule (subject to eligibility and total super balance thresholds).
If she contributes $390,000, her balance would increase to approximately $1.99 million — still within the projected $2.1 million cap.
This means:
• A larger portion of her sale proceeds can sit in a tax-free earnings environment
• Future investment income generated inside super may be taxed at 0%
• Her retirement income structure becomes more tax efficient
Combined with small business CGT concessions, this can significantly improve her after-tax retirement outcome.
Without proactive planning, sale proceeds often remain in higher-tax environments.
With planning, capital is directed intentionally into the most effective structure available.
What you should be thinking about now
There is no immediate action required.
However, this is a good time to:
- Review your projected super balance at retirement
- Revisit your contribution strategy for the next few years
- Consider spouse contribution and balance equalisation strategies
- Be intentional about pension timing
For some, accelerating contributions may make sense.
For others, preserving cap space for later years may be smarter.
There is no one-size-fits-all answer.
We don’t sit on the fence. We model. We decide. We act with intent.
Our approach at q4 financial
Superannuation is not a silo. It sits within your broader wealth framework — alongside tax planning, structuring, estate planning and lifestyle objectives.
As soon as indexation is formally confirmed, we will incorporate the updated limits into our modelling. If these changes create an opportunity — or require an adjustment — we will raise it with you.
For our actively engaged clients, this is already on our radar.
Smart choices today, for financial freedom tomorrow.