SMSF Pension Phase
Calculator AU 2026

The general Transfer Balance Cap is $2,100,000 for 2026-27 (indexed in $100,000 CPI increments — it rose from $1.9M to $2.0M on 1 July 2025, then to $2.1M on 1 July 2026). This is the maximum lifetime amount you can transfer from super accumulation into pension phase to claim the 0% tax treatment on earnings.

Your PERSONAL TBC may differ — it depends on the cap that applied when you commenced your first retirement-phase pension. The ATO tracks your personal Transfer Balance Account (TBA) via MyGov and reports the running balance.

Above the TBC: 15% excess-transfer-balance tax applies on notional earnings, and the excess must be commuted (rolled back to accumulation) or removed.

Accumulation phase (under 65 or pre-retirement): 15% tax on fund earnings (rent, dividends, interest); CGT at 10% effective for assets held >12 months (15% × 67% discount); concessional contributions taxed at 15% on entry. Pension phase (post-retirement, account-based pension or TTR after retirement): 0% tax on earnings and 0% CGT on assets supporting the pension.

The TBC limits how much can sit in pension phase. Earnings on $2.1M in pension phase tax-free vs. taxed at 15% in accumulation = ~$31,500/year tax saving at 10% return, or $630,000+ over 20 years of retirement — this is the largest super-tax break in the Australian system.

From the SIS Regulations 1.06 minimum payment standards for account-based pensions: under 65 = 4%; 65-74 = 5%; 75-79 = 6%; 80-84 = 7%; 85-89 = 9%; 90-94 = 11%; 95+ = 14%. The COVID-era 50% halving (2019-20 through 2022-23) ended on 30 June 2023 — FY 2023-24 onwards uses full rates.

Minimum is calculated on the pension account balance at 1 July each year. Failure to meet the minimum can void the pension's tax-exempt status for the year, meaning earnings revert to 15% accumulation tax.

Pension can be paid monthly, quarterly, annually — only the total annual amount matters.

TTR is a pension started at preservation age (now 60 for everyone reaching it, since anyone born after 30 June 1964 has a preservation age of 60) while still working. Lets you draw down up to 10% per year of the pension balance.

TTR can be combined with salary sacrifice into super to boost contributions while maintaining take-home pay. KEY CHANGE: from 1 July 2017, TTR pension earnings are taxed at 15% (same as accumulation) — UNLESS you've satisfied a condition of release (retired, age 65, etc.), in which case it converts to a tax-free retirement pension.

So 'TTR' pre-65 with continued work has only the drawdown flexibility, not the tax-free earnings benefit. Most members today commence retirement-phase pension at 65 directly.

If an SMSF has BOTH accumulation and pension members or accounts, it needs to apportion fund earnings between the two for tax purposes. Two methods: (1) Segregated assets — physically allocate specific assets to pension phase (e.g., 'these 1,000 BHP shares are for John's pension').

Earnings on those exact assets are tax-free; others taxed at 15%. Simpler administration but reduced flexibility. (2) Proportional method — calculate the average % of fund assets supporting pension phase across the year (via actuarial certificate from Class/BGL or similar), apply that % to total earnings as the tax-exempt portion.

More flexible (no asset-tagging) but requires annual actuarial certificate ($800-$2,000 cost). Funds using segregated method don't need an actuary in most cases.

Death benefits flow per binding nomination + super death benefit rules: (1) Reversionary pension — pension automatically reverts to a dependant beneficiary (spouse, child <18 or with disability) with continued tax-free status; recipient's TBC increased by reversionary value. (2) Lump sum to dependant — tax-free if recipient is a tax dependant (spouse, child <18, financial dependant). (3) Lump sum to non-dependant — taxed at 15% on the 'taxable component' (which includes most super for most members), plus Medicare levy. Adult financially-independent children are non-dependants for super tax purposes — meaning their inheritance is taxed at 17% if from your super taxable component.

Many SMSF death-tax planning strategies involve commuting and re-contributing to refresh the 'tax-free component', reducing tax payable to non-dependent adult children.

The TBC caps how much can sit in PENSION phase (0% tax). Above the cap, options: (1) Leave excess in accumulation phase (15% tax on earnings, 10% effective CGT on long-held assets). (2) Commute the excess back from pension to accumulation (avoids the 15% excess-transfer-balance tax). (3) Withdraw the excess as a lump sum (tax-free if you're over preservation age and met a condition of release).

The 15% excess transfer balance tax applies on the NOTIONAL earnings on the excess (calculated by the ATO based on the GIC rate) until the excess is removed. The first contravention has a 30-day grace before the tax starts.

Most SMSF members optimize by keeping pension phase exactly at the TBC and the rest in accumulation.

The TBC is separate from the Total Super Balance (TSB) threshold ($2.1M for 2026-27, which also tracks the general TBC) that controls non-concessional contributions. If your TSB ≥ $2.1M at the prior 30 June, you can't make non-concessional contributions the following year.

Concessional contributions ($32,500/year for FY 2026-27, indexed from $30,000) are not directly TSB-restricted but are TSB-relevant for unused carry-forward eligibility (TSB <$500k allows 5-year carry-forward of unused concessional cap). The general TBC and the TSB non-concessional threshold are different ATO concepts that happen to share the same number ($2.1M) — they are NOT interchangeable.

Always check ATO MyGov for your personal current figures.

If your Transfer Balance Account exceeds your Personal TBC, the ATO assesses Excess Transfer Balance Tax (ETBT) on the notional earnings during the period of excess. First-time excess: 15% on notional earnings (calculated via the ATO's notional earnings rate — typically GIC ~10% in current rate environment).

Subsequent excess: 30% on notional earnings. The 'Excess Transfer Balance Determination' from ATO gives you a deadline to commute the excess back to accumulation.

Common scenarios: pension commencement above cap, reversionary pension from deceased spouse pushes total above cap. The ATO Transfer Balance Cap Tracker on MyGov shows your live status.

Australian super legislation has changed every 2-3 years since 2007 (introduction of Simple Super reform). Recent changes affecting pension phase: 2017 — TBC introduced; 2018 — adjusted CGT relief for TBC transition; 2022 — relaxation of work test for over-65 contributions; 2023 — TBC indexed to $1.9M, then $2.0M on 1 July 2025 and $2.1M on 1 July 2026; 2026 — Division 296 ('Better Targeted Superannuation Concessions') became LAW (Royal Assent 13 March 2026) and commences 1 July 2026.

For SMSF members in pension phase under the current $2.1M TBC, the 0% pension tax remains stable, but Division 296 adds an extra 15% to earnings on the share of your total super balance between $3M and $10M — and 25% above $10M — across accumulation and pension combined, on realised earnings only (the earlier proposal to tax unrealised gains was dropped). Model it with our Australian Division 296 calculator.

Monitor ATO announcements before relying on long-term tax-free returns.