Have you paid your minimum pension requirements for this financial year?
As we approach the end of the financial year, we want to remind you that if you are receiving a pension from your SMSF, it is crucial to ensure that you meet the minimum pension drawdown requirements by 30 June. Failure to do so can result in your pension being rolled back to accumulation from 1 July 2024 – meaning the fund may have to pay up to 15% tax on investment income received, including any capital gains. It can also affect grandfathered deeming rules for Centrelink purposes, which can affect aged pension and health care card benefits.
The calculation of your minimum pension is determined by multiplying your pension account balance as at 30 June 2024 by the applicable percentage factor based on your age at 30 June 2024, and would have been reported to you in our 2024 EOFY letter. It’s important that the minimum pension is taken prior to 30 June 2025 to avoid any unwelcome tax implications.
If your pension commenced partway through the 2024-25 financial year, a calculation will need to be done on a pro rata basis.
If you are unsure of your minimum pension requirements for this financial year please contact the SMSF team at HFB. Our team can help ensure you meet the requirements. You can also refer to the ATO’s guidelines on minimum pension standards for more detailed information Minimum pension standards.