Account Based Pension

An Account Based Pension can be started when you are retired and reached the preservation age or reached 65 years of age. This type of pension account allows you to have unlimited access to your superannuation benefits. There are certain minimum amounts which have to be withdrawn on an annual basis for the Account Based Pension to retain its tax-free status.

A pension has the character of regular payments. These payments can be once a year, on a monthly, quarterly or other regular basis. The difference between a pension and a lump sum amount is that a lump sum is paid as a once-off payment.

Minimum Payments - current
Minimum Payments - for years before 2013

Notes

  1. Minimum amount calculated on 1 July each year for the transition to regular retirement payment
  2. In the first year of  the account-based income stream, work out the minimum payment pro rata on effective days in the year
  3. Minimum amount to be rounded up to the nearest $10
  4. These minimum amounts are set out in the Superannuation Legislation (click on the link for the legislation)

The ATO also has a video explaining how a Member can start to pay benefits to themselves and what conditions they need to meet in order to make income stream payment. Please see the video below.

SMSF paying an income stream

Trustees must minute their decision to start a Pension so that it can come into effect. Use this Trustee Minutes template to document your decision. There are many more documents available for download from our FREE DOWNLOADS section.

  • Whitty

    I had transferred some money from my pension fund to a term deposit within the same bank, but unintentionally made a mistake and put it under my name. Without knowing this mistake until preparing my FY16 tax return a month ago, the amount of money has been actually deposited back in my pension fund with another bank.

    The scenario is as follows:
    From pension fund bank account to my personal name bank account in TD: 1/1/15 – 1/4/15; again 1/4/15 – 1/7/15

    Back to pension fund bank account in TD from 2/7/15.

    I did not make any non-concessional contribution for FY16. Please advise if there is anything I can do?

    • superannuationwarehouse

      Whitty,
      If a genuine mistake occurred, you should correct the mistake as soon as is practicable.
      Make a declaration the auditor of the SMSF can rely on and ensure the transactions are accounted for in the financial statements and annual return in such a way it reflects the true nature of transactions.
      This should ensure compliance.
      Keep well,

      • Whitty

        Hein

        thank you very much for your advice. My accountant lodged the tax return last Thursday (or maybe Friday). He has put the amount into my accumulative account, treating it as my non-concessional contribution. As the money has been put back into the superfund name from 2July 2016, I trust that it will appear as my pension account in my 16-17 return.

        What are the consequences and what should be/could be done?

        I wish I found your website earlier.

        Kind regards
        Whitty
        P.S I tried to click on the blue box ‘Reply to superannuation warehouse’ under your answer, but was not able to send out the reply.

        • superannuationwarehouse

          Whitty,

          Just ask the accountant if he can re-lodge the annual return for you. If there is a genuine mistake in the return, he will correct the mistake and the annual return can be re-lodged.

          Trust this helps.

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