National Tax & Accountants’ Association Ltd

Editor: The ATO has issued an information sheet to help practitioners and their clients understand the implications of drawing an income stream from an SMSF after 60.

Circumstances

Chris, Rob and Jan are all 60 years old and want to start receiving an income stream from their SMSF.

• Chris retired from his job and never intends to work again.
• Rob has two jobs and will be leaving one job shortly, but intends to keep working in the other job for many years.
• Jan has one job, and intends to keep working until she is 65.

Results

Individual super fund members can receive an income stream when they meet a condition of release.

Chris has met a condition of release because he is over 60, and has retired from permanent employment.

He can start an income stream, and his fund must make the minimum annual payments required by law which are based on his age. There is no maximum payment amount.

Rob will meet a condition of release when he retires from one of his jobs because he is over 60.

This means he can start an income stream and his fund must make the minimum annual payments required by law. There is no maximum payment amount.

However, any future contributions received by the fund on Rob’s behalf, such as employer contributions or personal contributions, must be kept separately from the account used to pay his current income stream.

These future contributions can’t be cashed until a new condition of release has been met.

Jan is still working but she has reached her preservation age. This means she can apply for a transition to retirement income stream (TRIS).

Her annual income stream payments must be within the minimum and maximum amounts required under the TRIS rules.

Ref: ATO website: Starting an income stream at 60