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ARTICLE · 28 JANUARY 2013

ATO partially clarifies whether a pension ceases if minimum pension requirements are not met

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The ATO has clarified in a SMSF News Alert when a pension ceases and the consequences if minimum payments are not made.

AustraliaTax
Greg Cahill
Greg Cahill
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Due to some uncertainty over the effect of draft ruling TR 2011/D3, the ATO has clarified in a SMSF News Alert when a pension ceases and the consequences if minimum payments are not made.

The ATO position is:

  • A pension ceases if the minimum payment is not made during a year. The date of the cessation is the beginning of that year, and the payments actually made are lump sum withdrawals. The trustee cannot claim exempt current pension income in respect of that pension for that year.
  • If a pension ceases because the minimum payment is not made, then a new pension starts if the minimum payment is made in the following year.
  • In some circumstances where the minimum payment has not been made, the ATO may exercise their general administrative powers to treat the pension as continuing.

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