With budget night fast approaching, there is more and more press regarding potential superannuation changes that be made to both Superannuation Contribution limits and also pension or assessing of your super via an income stream.
With all of the uncertainty that currently exists, we suggest you contact your accountant if you are over the age of 55 and not currently drawing a pension from your superannuation. Your accountant will be able to advise the taxation implications of such a pension and talk you through this.
Ideally a decision to commence drawing a pension would be made prior to the federal budget being handed down on Tuesday, 3 May 2016.
As per the current rules, it is possible to commence drawing on your superannuation as a pension upon reaching your preservation age (55 and above, as per the table below). When the pension commences the fund must pay a minimum pension amount each year, and when commencing on the basis of having attained the preservation age, a maximum annual pension amount also applies.
If the Government does remove the ability to access super on attaining preservation age, access may be limited to permanent retirement or at the age 65. It is possible the government may also increase the standard access age from age 65 to age 67 to align with the age pension rules.
If you were planning on accessing super on or around your preservation age (pension access age), it may be worth considering commencing access earlier.
There are obviously eligibility and tax issues that would have to be considered before making a decision to access.
Preservation Age (Pension Access Age)
|Date of Birth||Preservation Age|
|Before 1 July 1960||55 years|
|1 July 1960 – 30 June 1961||56 years|
|1 July 1961 – 30 June 1962||57 years|
|1 July 1962 – 30 June 1963||58 years|
|1 July 1963 – 30 June 1964||59 years|
|On or after 1 July 1964||60 years|
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