On the 20th of November 2013 the Government introduced a Bill to Parliament to change how the income from a super fund pension is assessed.

Currently anyone on the Age Pension and withdrawing an Income Stream from their super fund has this income stream concessionally assessed in the eyes of Centrelink. The super fund income stream (pension) currently has a Centrelink deductible component attached which quite often can result in the super fund pension not being assessed for Centrelink at all.

From 1 January 2015, anyone who sets up a pension from their super fund will have the total pension income withdrawn from super deemed by Centrelink. As usual practice grandfathering provisions will apply.

What strategies are available?

  • Individuals of age pension age may consider retiring and commencing an income stream from super prior to 1 January 2015
  • People who are members of a couple could consider making their super fund income stream reversionary. All reversionary pensions will be assessed under the old rules in the event one member of the couple dies and the pension reverts to the surviving member.

Tips to avoid losing grandfathering status after 1 January 2015:

  •  Do not lose entitlement to the Centrelink income support payment
  •  Do not consolidate one pre-2015 pension into a new pension post 2015.
  •  If receiving an income stream from super consider the effects on your Centrelink entitlements before rolling super funds over to a new super fund.

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Thomas Jacks BCom (Acc), SMSF SpecialistTM, Adv. Dip F.S. (FP)
“I want to be able to assist clients with their investment and retirement planning by providing real strategy advice. It’s my aim to not only help my clients but to educate them by addressing the entire picture” Google Plus

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