Home' Charter : 0811 Charter Aug Contents August 2011 I Charter 49
> Turning 65 years of age
> Total and permanent disability
> Death of the member.
Where a person has attained
preservation age, they may commence a
transition-to-retirement pension regardless
of their retirement status.
Where a member has satisfied a condition
of release, the next step will be to review
the fund’s trust deed to ensure that all
necessary conditions under the deed are
satisfied before the pension is paid.
It is possible that some deeds may
restrict the payment of a pension in
certain circumstances, for example a deed
may not permit the payment of a pension
in the event of the payment of death
The minimum pension amount is calculated
as follows: account balance x percentage
The account balance is the capital
amount of the pension on 1 July in the
financial year in which the payment is made
or on the commencement day where the
pension commences during the year but
not on 1 July.
The percentage factor that applies to the
member is determined by the member’s
age on 1 July or on the commencement
day where the pension commences during
the year but not on 1 July.
When the commencement day of the
pension is during the year, the minimum
payment is determined pro-rata for the
number of days remaining in the financial
year, during the day of commencement
(refer to SISR Schedule 7(3)).
Where a pension is commenced on or
after 1 June in a financial year, no minimum
pension is required to be paid before 30 June
in that year (refer to SISR Schedule 7(4)).
The pension amount as calculated above
is rounded to the nearest $10.
As a result of the global financial crisis
the government had decided that the
minimum pension payable for the year
NATIONAL SMSF CONFERENCE:
INSIGhT. INFORM. INITIATE .
Mark Wilkinson CA will be among the speakers at the Institute’s second National SMSF
conference in Melbourne on 19-20 September 2011. With a strong technical program
and impressive line-up of speakers and panellists, the emphasis is on ensuring delegates
take away practical information and advice that can be used immediately to help both
practices and their clients. In such a dynamic and changing sector, the conference
examines not only changes already announced but also looks at future changes. Blending
business and leisure, day one features a cocktail function with special guest speaker chef
Matt Moran, while the conference lunch (with its AFL theme) is not to be missed. Visit
charteredaccountants.com.au/SMSF2011 for more information or turn to our training
and development story on page 52.
ending 30 June 2011 should be reduced
by 50 per cent and the minimum pension
payable for year ending 30 June 2012
reduced by 25 per cent. The purpose
behind the reduction in the minimum
pensions for the above years is to enable
pensioners to retain a greater proportion
of their accumulated superannuation
benefits in the fund, until after the
investment markets returned to more
Where the pension that is received is a
transition-to-retirement pension, the maximum
amount that can be withdrawn in any financial
year cannot exceed 10 per cent.
PAYG – TAXATION
From 1 July 2007, superannuation
pensions from a taxed source are received
by the pensioner tax-free after the
pensioner’s 60th birthday.
For pensioners aged between 55 and
59, the pension will be taxable based on
the taxable component percentage of the
pension at its commencement.
Where a pensioner has turned 55
years of age they are eligible to receive
a 15 per cent tax rebate, based on the
taxable percentage of the pension at
Note that if a member is entitled to
pension payments in the year they turn
60, only those pension payments received
after their 60th birthday will be tax-free.
The reason for this is the pension is either
assessable or not, based on the day that it
is received by the pensioner.
Where a member receives pension
income in the year they turn 60, the PAYG
withholding schedules enable the trustee
to calculate the appropriate amount of
PAYG to be withheld.
If a member is under the age of 60
when a pension commences and the
pension includes a taxable component, the
member must complete a tax file number
declaration. On this form the member
advises whether they will be claiming the
tax-free threshold, the deductible amount
and the tax offset. Note the tax-free
threshold is only claimable from one source
of employment or pension income.
Members aged 55 to 59 are entitled to
a 15 per cent tax offset on the taxable
component. The tax offset applies to the
full amount of the pension less the annual
The rebatable portion is defined
in Section 140ZQ of the Income Tax
Assessment Act 1936 (ITAA 1936). The
entitlement to the tax offset is set out in
Section 159SM of that Act.
Note if a member is aged less than 55,
they are not entitled to the offset at all
unless the pension is:
> A death benefit pension
> Received by a member who is totally and
Once the member turns 55 they will be
entitled to the 15 per cent tax offset.
Mark Wilkinson CA is a partner at Deloitte Private.
Links Archive 0711 Charter July 0911 Charter Sept Navigation Previous Page Next Page