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 There are certain minimum amounts which have to be withdrawn on an annual basis for the Account Based Pension to retain its tax-free status.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 2020

Exempt Current Pension Income (ECPI)

When an account-based pension fails to meet the minimum pension standards it will cease for income tax purposes from the start of that financial year and will lose eligibility to claim exempt current pension income.


  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. Feel free to use our templates for a Pension Commencement Minute (pdf) (Word), to document your decision. There are many more documents available for download from our free downloads section.

Coronavirus effect on pensions

The Coronavirus has negatively affected the pension account balances of many SMSF Members. To assist Members with pension accounts, the government has halved the minimum annual payment required for the 2019-2020 and 2020-21 financial years. For a video explaining this, please see our Coronavirus Relief page.

  • 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

      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


        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
        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


          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.

  • Rod Sands

    Whilst in Pension Phase, say a pension of 4% of the closing balance of the fund previous FY(eg 4% of $1m) , can additional contributions still be made to the Fund, say a $100K?.
    Would the additional contributions automatically drop one out of Pension Phase?

    • Hein Preller


      If you are over 65, you have to satisfy the work test in order to contribute to the SMSF. This means working 40 hours in a 30 day period any time during the year:

      The $100k is a non-concessional contribution as the limit on concessional contributions is now $25k per year. As this is after-tax money already, the SMSF will not be taxed on this non-concessional contribution. More on contributions here:

      Remember all contributions get allocated to your accumulation account. To transfer it to pension, you need to do a minute. This minute is a document noting the total or part of your accumulation balance being transferred to the pension account. When we do the accounting for the Fund, we will use the minute to do the transfer from your accumulation to the pension account. You can download a template for the pension minute here:

      Lastly, also remember that you can have a maximum of $1,6m in your pension account per Member now.

      This is a mouth full of info, but if there’s any questions, please let me know.

  • Rod Sands

    Can non concessional (post tax) contributions still be made to the Fund whilst in Pension Phase

    • Hein Preller


      If you are under 65, you can still contribute to the SMSF, both concessional and non-concessional contributions.

      Once you are over 65, you have to meet the work test to be able to contribute. More on the work test here:

      Keep well,

  • Frank Burton

    Is there a fee from your side to set up a pension account?

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Superannuation Warehouse is an accounting firm and do not provide financial advice. All information provided has been prepared without taking into account any of the Trustees’ objectives, financial situation or needs. Because of that, Trustees are advised to consider their own circumstances before engaging our services.