1. The purpose and effect of these increasing minimum pension payments is to progressively move money out of your tax-advantaged super fund over your life-time. You are required to take this withdrawal from your fund as cash, so if the minimum pension is greater than the amount the fund earns in income, some assets will need to be sold to satisfy this cash requirement. You are not required to spend this money, you can invest it elsewhere, but now these assets are subject to normal tax outside super.

    The purpose is to ensure that your super is used to support you in retirement and not passed on to your beneficiaries as a tax-advantaged gift.

    The effect is that, as we are all living longer than previous generations, these mandated withdrawals mean we are depleting our super funds faster than is prudent.

    The Liberal / National Coalition promised before the 2013 election that they would review these minimum pensions in the light of our risk of outliving our money. After 2 years there has been not a peep about this.

    Another broken promise?

  2. Jimmy Lee says:

    Hi Trish
    This is the first time I read your articles and it is very informative.
    Why is the temporary relief advantageous to pensioners when they are getting lower pension?
    Is it because they can get more from aged pension or other government assistance?


    • Terry Rodricks says:

      Hi there,
      Thanks for your information on pension relief. Could you please clarify the following.
      Calculation of minimum pension for a person aged 60 and balance $100,000 on 1st July
      100,000×3%=3000/12=$250 per month or annual payment of $3000
      I would appreciate if you could clarify that the required annual minimum should be equally distributed over the year.

  3. alan barnes says:

    Thank you all for keeping me up to date as a SMSF trustee. Ps. I got 100% first go. Thank You for all of the info, which I read and digest. A happy 66 year young.

  4. Dave Rode says:

    I am a Financial Information Service officer at the Cranbourne office and find your site very helpful. thank you.

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