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Minimum pension payments

Account-based pensions are subject to annual minimum pension payments based on a fund member’s age and account balance. The minimum payment amount for a superannuation income stream (pension) is the account balance on 1 July (or account balance at start of income stream if a new income stream) multiplied by the percentage factor.

The percentage factor is is based on the beneficiary’s (recipient of income stream/pension) age on 1 July in the financial year in which the payment is made (or, if a new pension, the age of the beneficiary on commencement of the pension/income stream).

Set out below are all SuperGuide articles explaining Minimum pension payments.

Superannuation rates and thresholds for 2016/2017 year (and earlier years)

SUPER ALERT! On 3 May 2016, the federal government announced an IMMEDIATE cut to the non-concessional contributions cap, including a cessation of the bring-forward rule. Australians are now subject to a lifetime non-concessional cap of $500,000, rather than the annual cap of $180,000 (and the … [Read more...]

Retirement and tax: What are the minimum pension payment rules?

Q: I am 63. I want to retire next year but I am not sure if I want to access my super benefits yet. I have heard that when I retire, I must withdraw some super benefits each year, otherwise I won’t receive tax-free super benefits. Can you please clarify the rules for me?A: Your question is … [Read more...]

SMSF pension payments: A little bit under may be OK

SuperGuide often receives questions from readers asking what happens if they don’t withdraw the minimum pension amount required to be paid each year from their pension account, especially when the underpayment is due to an honest mistake, or due to circumstances beyond their control.Before … [Read more...]

Super pensions: Is there an upper limit to how much we can withdraw?

Q: I am aware that the minimum amount of super pension withdrawal is 4% (for under 65s) of the pension account balance. Is there now any MAXIMUM amount of pension required to be drawn from a super fund? If no maximum payment is required, is this still the case for account based pensions, transition … [Read more...]

Minimum pension payment: At what date do you determine the age for payment calculation?

Q: I am drawing on an account-based pension from my SMSF. I turn 65 in June 2016. Will I need to draw a minimum of 4% or 5% for the 2015/2016 year, and does the minimum pension factors change for the 2016/2017 year? Or, in other words, what is the determining age, the one at the start of the … [Read more...]

Minimum pension payments for 2015/2016 and 2016/2017 years

Note: This article explains the superannuation minimum pension payment factors for the 2015/2016 year and for the 2016/2017 year. The article also lists the minimum pension factors for the 2014/2015, 2013/2014, 2012/2013, 2011/2012 and 2010/2011 years. Alternatively, if you are looking for the … [Read more...]

SMSF pension: How do I calculate my minimum pension payment?

Q: I run our SMSF. I wish to retire at 58. I am a little confused about the 4% minimum rule for pensions. Do I have to withdraw 4% of my total accumulation SMSF fund, or do I move some of the assets into a pension fund and then draw 4% a year?A: You ask a very popular question. The minimum … [Read more...]

SMSF Pension Guide: ATO’s top 20 tips

Note: We have created this valuable guide to assist those readers running SMSF pensions, or for any reader considering starting a SMSF pension.In a recent speech to an accountants’ conference, Kasey MacFarlane, ATO’s Assistant Commissioner SMSF Segment, clearly articulated the key SMSF pension … [Read more...]

SMSFs: Taking a lump sum from your super fund (5 Q&As)

Q: We have a SMSF with two members, both members having accumulation accounts and pensions. We understand that when you draw down pension amounts, the drawdown amount reduces the pension balance in accordance with the pre-existing tax-free component/taxable component, and any super contributions you … [Read more...]

SMSF compliance: ATO’s hit list for the 2015/2016 year

Each year, the ATO publicises a list of compliance areas that the regulator intends to target when reviewing SMSFs during the financial year. This is the hit list for the 2015/2016 year.Note: The ATO’s compliance approach is to deal with less serious breaches in a collaborative way with the SMSF … [Read more...]

Temporary pension relief is… temporary

Q: I wondered if a SMSF pension that was started at the relief rate of 3%, would it then have to increase to the 4% once the relief period expired, or would it remain at 3% because it was started at that rate?The temporary pension payment relief (75% of the usual minimum pension payments) … [Read more...]

Remember earlier Swan attack – freeze contributions caps and halve co-contributions

The 2012 Federal Budget has introduced further changes to the super rules, which we cover in other articles on this website. In this article, we explain the super changes the government snuck through in November 2011 although Federal Treasurer, Wayne Swan, may be hoping that we forget his earlier … [Read more...]