Ok so the heading sounds great, and who wouldn’t want more cash?  With rising interest rates and general market uncertainty, we all want a little extra in our bank balance.

Let’s have a look at some options out there that may just provide an added windfall.

1. Lost Super

Remember that job you had once packing shelves at the supermarket, or the paper delivery?  Ever wondered where the super went?  Changed jobs and never really looked at the paperwork you signed?  Changed address or email and lost contact with an old fund?  Chances are you may have some lost super out there and it is worth checking.

Good news – the money is still yours, you just need to claim it.  It will either be with the ATO or with the original super fund.

The search is relatively simple.

• Go to MyGov website and log in
• Ensure your account is linked to the ATO
• Select ‘Super’.

This will show detail of your super accounts and consolidate them into one fund if that is your preference.  Not everyone wants to do this – consider whether there is insurance held in super you require, which account to consolidate to and if there are any advantages to a particular fund.

You can also call or fill in a form to look for super. More detail can be found at https://www.ato.gov.au/forms/searching-for-lost-super/.

Sorry to say, that unless you meet a condition of release, this isn’t going to benefit you until retirement.

2. Unwanted items

One option for an immediate cash injection is to sell some unwanted items from around the house.  Remember those presents from last year, that unwanted home décor, the kid’s bike they have outgrown, computer games that just aren’t cool anymore?  Clothes can definitely raise a few dollars from a clean of the closet. With a multitude of options to sell online, this can be an excellent way to raise money and buy something you want now.

Depending on the online platform used, take care with scams, consider insurance for expensive items sent out and consider where is best for pick up / drop off of items.

Yesterday’s goods are today’s treasures!

3. Grow your own plants

So the kids are now on holiday and looking for something to do. Why not put them to work on making a veggie garden?  This can be a fun experience for the kids and yourself.

Take the kids to your local garden centre and let them choose some of their favourite veggies and herbs. The enjoyment of eating your own carrots or cherry tomatoes combined with a few extra dollars off the grocery bill.  Planting a citrus tree will also pay off over time.

4. Airtasker / Uber and part-time roles

Part-time roles can help fill a gap at this time of year and whilst time with the family is important, a few hours spent on an odd job could just get the ultimate present for someone.

Airtasker is an online site where people list odd jobs they want done. If you can assemble flat packs or trampolines, this may be for you. Have a look on the site for typical prices and know what you are worth before you sign up for a job.

Uber will allow you the flexibility to choose your hours and your trips. You don’t always get to choose who the passenger is, but if you are going from point A to point B anyway and can get some money from someone needing a lift, this may be perfect.

These ideas may not be for you and perhaps controlling the budget in other areas is a better way to save. With rising living costs and loan repayments, planning on how to manage your finances is critical. If you need some help, talk to one of our financial advisers.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

We plan for many aspects of our lives, but few people plan for future aged care needs. Now is the time to change that trend.

The truth is, most of us avoid thinking about our own future aged care needs, delaying our decisions until perhaps they are taken out of our hands.

Life expectancies are increasing. This means not only might we expect to live longer than our parents and grandparents, but we might also expect longer and more active retirements. However, this does not remove the possibility that we may need help with daily living and medical care in our older years.

If we reach a point when we are increasingly vulnerable, we do not want to be left unprepared.

Planning creates peace of mind.

Planning for our retirement, as we dream of travel, cruise ships and caravans as well as more time playing with the grandkids, can be quite enjoyable. Perhaps that’s why we put off planning for our aged care needs – it’s not as much fun to think ahead to a time when we might need more support.

But with the right advice, planning ahead offers many benefits and can be easier than you think. Benefits may include:

• Peace of mind for you and your family
• Taking pressure off family when a crisis occurs
• Allowing you to have a voice, and
• Avoiding costly mistakes.

Creating a plan that will work for you includes consideration for what sort of life you want to live and what makes a good life for you. This should take into account options for where you could live but also how to continue your interests and stay connected to family, friends and your community. Understanding the costs and planning your finances is a key component of making the plan work effectively.

Don’t leave it too late!

Don’t leave your aged care planning too late. We have helped many of our clients to start the planning process and often discuss when and how to bring your family into this process.

If you are ready to start the conversation, contact our Head of Financial Planning, Robert Syben at robert_syben@investmentcollective.com.au and let us work with you to create a plan for all of your retirement needs.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

It is almost Christmas, so it is time for the present wishes;

• Lower inflation
• Lower interest rates
• Share market bounce back
• Iceberg lettuce
• Petrol vouchers
• Ability to retire stress free in the future.

We would all like to live in a perfect world, unfortunately, this just does not happen. For those looking at retirement, now may be more concerning than ever. In a world of rising costs, volatility and uncertainty, many people fear if they will have enough money to retire and cease work.

There are plenty of risks we face with retirement which can make us all apprehensive. To restate our adviser Cheng Qian’s article from last October, here are some of the key risks.

Sequencing risk

This is the risk of the market facing a severe and unexpected downturn just before you retire. As a pre-retiree, you may not have the time horizon to wait out a recovery. An example would be a retirement nest egg of $1,000,000 falling to $750,000 just as you are about to retire. At a drawdown of 5 percent, this is a reduction of annual income from $50,000 p.a. to $37,500 p.a. and a big hit to anyone’s retirement.

Lower than expected returns

Retirement portfolios are not designed to shoot the lights out but to generate a sustainable level of return with a focus on capital preservation. However, if returns do not stack up for whatever reason, it will lead to a rapid deterioration of your capital and your savings may not last as long as you designed them to.

Longevity risk

This is the risk of retirees living beyond their savings. With improved health care and higher standards of living, life expectancy is higher than ever. Hence, with all else equal, you are more likely to outlive your retirement savings.

The obvious question is “How much will I need?”

There is no single answer, and every one of us have different expectations of what retirement looks like and as a result, we need to look at what kind of research exists.

A good guide lies with the Association of Superannuation Funds of Australia (ASFA) which publishes a ‘retirement standard’.

ASFA have outlined two different living standards (comfortable and modest). These values are updated quarterly to reflect Consumer Price Index (CPI) increases (which have risen more dramatically in 2022). For both options, they assume the family home is owned outright and that the individual is ‘reasonably healthy’.

• A modest lifestyle is exactly that – a lifestyle higher than solely having the age pension as income but is a basic income for expenditure.
• A comfortable lifestyle includes a few ‘extras’ around holidays, technology, insurances, and general expenses.

The next question is how much?

Again, the standard shows this in two ways – expenses and savings at retirement. Note the savings amount allows for a part or full age pension to also be received.

The standard is therefore suggesting that a couple looking at retirement is really needing to have at an absolute minimum $70,000 (for a $43,250 per annum expenditure target). Everything over this amount will allow a higher level of lifestyle. The question will then shift towards your personal lifestyle requirements to determine your needs.

If there is one thing for certain, it is that uncertainty will always exist, and markets will go up and down. The thought of retirement will always be somewhat of a scary proposition, due to the loss of regular income and security employment provides. There really is no set guarantee and no defined perfect time for retiring. The ability for humans to be flexible in their approach, wants and choices are what enables us to take up the challenge and to make decisions to move our lives into the next phase. A volatile market does not have to be a roadblock and could be the opportunity for change in our lives being sought. Having some basis of comparison for what might be required to fund retirement to what you have now, can be an excellent way to start planning.

Source: ASFA

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

The pros and cons of a six-member SMSF have been extensively discussed in the financial services industry. One thing we know for sure is that a six-member fund is not for everyone. The majority (more than 93%) of SMSFs in the industry are either single-member SMSFs or two-member SMSFs.

Below are some pros and cons of having a six-member SMSF:

Pros:

• You can have more money (greater purchasing power). This will allow for greater diversification of assets or investment in higher-value assets.
• This could allow your children to invest their super in more substantial investments and achieve economy of scale, especially when their super balance is low.
• Having more members in your super fund will also reduce the cost of managing your family members’ super, i.e., a new SMSF setup cost, ATO levies and other costs, as the fees are spread across more members.
• If your children make regular super contributions, it will be easier to make your pension payments.
• The taxation strategies may be implemented more efficiently.
• Easier to meet Australian Super Fund residence requirements when/if you or your children travel overseas for an extended period of time.

The drawbacks include:

• Lifestyle considerations. Two sets of investment strategies may be required. However, differing investment timelines between the parents and kids may not be a major issue if all members agree on a range of diversified assets.
• Disputes and conflicts between members can make the decision-making and fund administration difficult. Who does what and the rules about the fund’s operation will need to be decided and documented in advance.  The SMSF’s Trust Deed will need to be reviewed and updated to cater to the increase in member numbers.
• Voting rights can be necessary within a six-member SMSF.  The children may outvote their parents, especially when one parent gets old and becomes incapacitated.  Having voting rights based on each member’s balances or any other method may need to be considered.
• Excessive transparency of the parents’ superannuation balances could cause potential financial abuse.
• Possible death benefit disputes. Succession planning and future control of an SMSF become more important with more member SMSFs.
• The forced sale of assets. The SMSF may be required to sell assets to allow for superannuation splitting. Sound planning may be required for situations where children need to move their super benefits to another super fund.

If you are thinking of getting your children into your super fund, a thorough review of your family situation and specialized personal advice are required. Get in contact with our experienced team of advisers so we can help you identify a superannuation strategy that works for you and your retirement goals.

Reference – this article is written in conjunction with Monica Wang @ Moneta Super

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

For many retirees who were unable to enjoy the wonderful retirement savings vehicle that superannuation now affords, the age pension is a major source of income for them. A bonus of part-pension eligibility is the prized ‘Pensioner Concession Card’ (PCC), even if the actual benefit is only minuscule.

Eligibility for the age pension is tested under both an ‘income test’ and an ‘assets test’ and the test that produces the lower benefit is the one that is used. Accordingly, the following traps need to be avoided.

Additional income

If you are assessed under the assets test then you can potentially earn additional income without having your benefit impacted. For instance, a home owning couple with $800,000 in assessable assets will receive an age pension benefit of $137 each per fortnight under the assets test. Under this scenario, their assessable income can be as high as $68,000 before their benefit reduces.

This potentially allows pensioners to undertake some form of work, if they are inclined, without having their age pension or PCC entitlement affected.

Valuing assets

The principal residence is not an assessable asset, however, furniture, vehicles, boats and caravans are. Many pensioners fall into the trap of valuing these assets at replacement value which could be costly as every $10,000 of excess assets reduces the age pension by $780 a year. To avoid the trap, furniture, vehicles, boats and caravans should be valued at what you expect to get from them in a garage sale, not what it will cost you to replace them.

Don’t spend just to get or increase the pension

There is absolutely nothing wrong with spending money on a holiday, renovating the home or enjoying a better quality of life. $100,000 worth of family home renovations increase your age pension by $7,800 per year, however, it will take almost 13 years of the increased pension to get that $100,000 back, not to mention the forgone return on that money. The benefits of renovating the home or travelling may be compelling, however, the main thing is to not spend money with the sole purpose of getting a higher age pension benefit.

Revaluations

Each year on 20 March and 20 September, Centrelink updates the value of market-linked investments such as shares and managed funds. Notwithstanding this automatic update, at any time the asset value can be updated. This means the rules favour pensioners because if the value of your investments rises, you can wait for Centrelink to run the automatic update in March and September. Conversely, if the value of your investments decline, you should notify Centrelink immediately which may lead to receiving a greater benefit.

Gifting

A pensioner can reduce their assessable assets by giving money away, however, it is important to seek advice. The rules allow gifts of $10,000 in a financial year with a maximum of $30,000 over five years. A pensioner could reduce their assets by $20,000 in a matter of days by giving away $10,000 just prior to 30 June and then another $10,000 on 1 July or thereafter.

Superannuation

Where a member of a couple has not yet reached age pension age, it can be beneficial to hold as much super in the younger person’s name in ‘accumulation’ mode as it will be exempt from Centrelink assessment. However, the moment that person is age pension age or a pension is commenced from that accumulation account, Centrelink will assess that asset.

Mortgaged assets

A common trap arises where a loan is used to purchase an investment property and the loan is secured by a mortgage against the pensioner’s residence. A debt against an investment asset is only deducted from the asset value if the mortgage is held against the investment asset. If the mortgage is secured against another asset, the full value of the investment asset will be assessed. The effect could be a complete disaster.

Bequests

Another trap can arise due to the significant difference between the asset cut-off point for a single person and that for a couple. At 20 September 2021, the single home owner asset cut-off point was $593,000, whereas for a couple it was $891,500. By leaving assets to each other, the surviving partner may lose entitlement to the age pension, hardly helping the grief being experienced at that time.

Jointly owned assets with adult children

A decision without proper planning can have consequences in the future. A scenario many of you have no doubt faced, especially in recent times, is helping a child to enter the residential property market for the first time. It might seem like a great idea at the time for a couple aged 55 to take on a 50% share of a house worth $400,000 to enable their child to borrow against their portion of ownership, but how might this look when you get to age pension age and you still own 50% of that property?

The value of the property could appreciate substantially over the next 12 years i.e; when the couple become eligible for the age pension, to the point that it results in their assets being above the asset test cut-off point.

If their 50% interest is then transferred to their child, not only will there be potential Capital Gains Tax implications but Centrelink will treat that ’gift’ as a deprived asset for the next 5 years, further adding to age pension eligibility woes.

In this instance, it would be far more appropriate for the couple to become a guarantor for their child, possibly putting up their own home as part security. The rules of the age pension are complex, sourcing appropriate advice could pay dividends!

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

From 1 October 2021, rollovers into and out of a Self Managed Super Fund (SMSF) can only be processed via ‘SuperStream’.

What is ‘SuperStream’?

SuperStream is the electronic system used to transfer money and data to super funds. It is used to process employer contributions to APRA-regulated funds and for rollovers between super funds.

The move to include SMSFs in SuperStream rollovers is welcomed by many SMSF fund members who have experienced delays in receiving rollovers into a SMSF.  The SuperStream protocols require paying funds to process the rollover of a member’s benefit electronically and within three days of receiving a valid request.

Many SMSFs have mature members who are not anticipating receiving any further rollovers hence, they have paid little attention to the SuperStream requirements.  However, if members decide to wind up their SMSF and rollover into a retail fund, they will generally need to register for SuperStream before the SMSF can process the rollover.  SuperStream, however, can be activated at any time and can be expected to be established within days.

ASIC’s requirement for a SMSF’s investment strategy to outline an exit strategy may require SMSF trustees to consider SuperStream as part of their next regular investment strategy review.

What is required for an SMSF to be SuperStream ready?

Most professional administrators are SuperStream ready, and many have been using SuperStream to process rollovers for some time. Where a SMSF doesn’t use professional administration services they will need the following:

• An electronic service address (ESA) which is provided by most SMSF software platforms, administrators, tax agents and some third-party suppliers. The ATO provides a list of ESA suppliers on their website – ATO ESA providers.
• A unique bank account recorded with the ATO.
• A Unique Superannuation Identifier (USI) which is the fund’s Australian Business Number (ABN).

Processing a rollover

The paying fund has three days from receiving an actionable rollover request to process the payment. If the rollover request has incomplete information, the trustee of the paying fund must request the required information within three days.  Additional time may be allowed if the paying fund needs to sell down assets.

Whilst the prompt receipt of rollovers into SMSFs is welcomed, there may be many practical reasons why a SMSF is not able to action a request to rollover into another fund within the three day timeframe.  In the absence of professional administration, it is not always possible to accurately calculate a member’s entitlement within three days.  In addition, the sale of assets to make the cash payment may take longer than the time allowed.

Where one member is leaving because of a dispute with another member, further difficulties in meeting the required timeframes may occur.

Another requirement of the SuperStream system is that the trustee of the receiving fund must allocate the rollover to the member’s account within three days of receipt of the funds. For SMSFs without professional administration, a minute regarding the allocation may be required.

Conclusion

SMSFs expecting to receive member benefits rolled over from another fund will need to ensure they are registered for SuperStream prior to the member requesting the rollover. Likewise, registration will be required before a SMSF trustee can rollover a member benefit to another fund.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

The receipt of inheritance brings both financial and emotional considerations.  Financially, an inheritance will more often than not improve one’s financial position by allowing debt to be paid down or the wealth base to increase.  Emotionally, the loss of a loved one is never easy, or the responsibility of applying the inheritance to ensure a ‘legacy’ is left may become a real burden.

For Age Pension recipients, there are additional considerations.

Centrelink assessment of an interest in a deceased estate

An individual’s interest in a deceased estate is an assessable asset once it is received or can be received.

It can take considerable time to finalise an estate, it is accepted that a beneficiary is unable to receive their interest in a deceased estate for up to 12 months from the death of the testator.  However, if the estate is finalised earlier the interest will be assessed from the date it is received or able to be received.

If after 12 months of the death of the testator the estate has not been distributed, Centrelink may consider the facts of the case to determine what is preventing the estate from being finalised.  If a beneficiary has contributed to the delay, their interest will be regarded as being available.

If the beneficiary is not the executor and the executor has discretionary power on how the estate is distributed, Centrelink will accept that the beneficiary has no control over the delay.  Also, Centrelink will accept that where the estate debts are yet to be paid the estate interest cannot be received.

Deprivation provisions are intended to limit the potential for recipients to avoid the assets and income tests. They apply to a person’s interest in a deceased estate or superannuation fund if the person:

• Waives their right to their interest in the deceased estate or superannuation fund and the person obtains no, or inadequate consideration.
• Directs the executor of the estate or trustee of the superannuation fund to distribute their interest in the deceased estate or superannuation fund to a third party and the person obtains no consideration or inadequate consideration.
• Gives their interest in the deceased estate to a third party after the estate has been finalised for no or inadequate consideration, or
• Gifts their interest in a superannuation fund.

Once a person’s interest in a deceased estate is assessed, the value of this asset or the deemed income may reduce that person’s age pension entitlement, possibly to zero.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

When a person dies, generally the responsibility for administering the deceased estate falls to the legal personal representative. This person may be an executor or administrator who has been granted a court’s probate or letters of administration. It is important to note that while there are no inheritance or estate taxes in Australia, the legal personal representative is likely to have important tax and superannuation issues to attend to.

It is important to notify the ATO and the deceased person’s super fund of the death as early as possible. The ATO will determine whether a tax return is required for the deceased person and the super fund will commence a process for the release of any superannuation entitlement. A formal death certificate will be required to fulfil an official notification of death.

Accessing information from a deceased person can sometimes be tricky. You’ll need to have probate granted or a letter of administration. In the past, tax agents, BAS agents or legal practitioners engaged by a legal personal representative were unable to access this information directly. However, effective from 15 May 2020, the legislation has been modified to allow information from a deceased person to be provided to these agents directly, given the complications associated with the tax affairs of deceased estates. A deceased estate data package will also be provided by the ATO, which includes;

• Individual tax return information for the last three income years.
• An extract of income and investment data for the last three income years.
• An extract of notices of assessment issued for the last three income years.
• Copy of the most recent statement of account.
• Any outstanding ATO debts.
• Any superannuation accounts identified.
• Payroll data received for the current year.

From here, an assessment is made as to whether an individual tax return or trust tax return is required for the deceased person and their estate. All outstanding tax implications involving employment income, investment earnings and superannuation distributions will be assessed and any tax payable or refunds are applied to the deceased’s assets.

As a beneficiary of a deceased estate, there may be some tax obligations depending on the following factors;

1. Receiving super benefits – if the deceased person had super, the super fund’s trustee will work out who to pay the benefit to and how it will be paid (lump sum or income stream). If a Binding Death Nomination is in Place, the superannuation trustee will follow those instructions. Whether tax is payable depends on whether the beneficiary is a dependant under taxation law, whether it is paid as a lump sum or income stream, the breakdown of the tax-free and taxable components of the fund, the ages of the beneficiaries and the age of the member when they died. For most funds, there will be some tax payable unless you are a spouse or financial dependant of the deceased.
2. Receiving investment assets – Capital Gains Tax (CGT) will apply to the disposal of an asset, however, if you receive an asset, you will not be affected by CGT. If you later sell that asset, CGT may apply.
3. Receiving/earning income – income is deemed assessable from the date of entitlement rather than the date of payment. Beneficiaries need to be conscious of reporting such income in the year of entitlement.

There is no one size fits all approach regarding deceased estates and it is usually a long-drawn process. It is highly recommended that you engage the accountant or financial adviser of the deceased and employ a legal practitioner to assist with the process.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

In what seems to be the ever changing world of superannuation, the Commonwealth Government has recently passed the following reforms:

Increasing the number of members for a Self Managed Superannuation Fund (SMSF) to six from 1 July 2021.

This is useful for a family business that wants the SMSF to own the commercial property out of which the business trades, thereby ‘keeping the wealth within the family’ rather than contributing rent into the wealth accumulation strategy of an external landlord.

Increasing the number of members in a SMSF will allow for the asset pool to increase thereby opening up investment options and strategies available to the fund in order to meet wealth accumulation objectives.

Extending bring forward rules for Non-Concessional Contributions (NCC) to those 65-66 years old from 1 July 2021.

From the 2020/21 financial year, people aged 65-66 were permitted to make a voluntary contribution into superannuation without having to satisfy the work test. This allows for a NCC to be made up to the now increased $110K maximum limit, per annum from 1 July 2021.

At the time of this introduction to allow those aged 65-66 to make a NCC, the ‘bring forward’ of two future years was not permitted, which of course was inconsistent with the spirit of superannuation. However, it was hotly anticipated that the restriction would eventually be removed, which it has now been. Two future years of NCCs can now be brought forward resulting in a maximum of $330K that can be voluntarily contributed into superannuation for those aged 65 and 66.

Extend pension drawdown relief by 50% over the 2021/22 financial year.

For the last two financial years, the minimum pension payment required to be taken by superannuants from their pension accounts was reduced by 50%.

This was a measure introduced to alleviate the pressure on pension accounts being drawn down unnecessarily, resulting in ‘forced’ asset sales to shore up available cash at a time when financial markets were depressed. In essence, the concept was aimed at increasing the ‘longevity’ of pension accounts.

This measure has been extended into the current 2021/22 financial year. This no doubt will be well received by those in pension mode that don’t require the otherwise ‘normal’ minimum withdrawal.

Superannuation guarantee increase to 10% on 1 July 2021.

This refers to the amount employers are required to ‘compulsory’ contribute into superannuation on behalf of an employee. Previously the rate was set at 9.5% of gross salary, it is now 10%.

Another change to be aware of is the increase in contribution caps for the two different types of contributions. As mentioned above, the ‘NCC’ cap has been increased to $110K per annum. Similarly, the ‘concessional’ or taxable contribution cap has been increased by 10% to $27,500 per annum.

There is further scope and incentive for those in accumulation mode to increase the amount that can be contributed into their retirement asset of superannuation. These are positive steps to alleviate gaps in the retirement system, which will make it fairer for everyone.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

Government support comes in all shapes and sizes and the temporary minimum pension drawdown relief was one key measure designed to support retirees at the onset of COVID-19. Superannuation pensions and annuities are subject to rules that determine the minimum and maximum amounts to be paid in a financial year. The legislation allowed superannuation accounts that are currently in drawdown/pension mode to effectively halve their annual drawdown limits and preserve superannuation balances during the COVID-19 market sell-offs.

These rules were initially legislated for the 2019/20 and 2020/21 Financial Year’s (FY):

Referencing the above table, a retiree aged between 65-74 would normally need to draw a 5% minimum amount per annum from their pension accounts. The drawdown relief legislation allows this individual to draw only 2.5%. This preserves the superannuation balance and avoids the need to sell down investments during the height of the market sell-offs.

An example would be a retiree aged 65 with an $800,000 pension balance. Under normal circumstances, 5% must be drawn per annum, which is $40,000. However, with the drawdown relief in place, only 2.5% is required to meet the annual legislated drawdown requirements, which is $20,000.

Benefits of this temporary measure to retirees

• Preservation of superannuation balance (tax-free nest egg).
• Avoids crystallising losses (from the volatile COVID-19 sell-offs).
• Flexibility on where to draw income (access taxable sources before superannuation).

On Saturday 29 May 2021, the government announced that a further extension to this measure is being considered for the 2021/22 FY.

The proposed minimum pension drawdown for 2021/22 FY:

Key takeaways from the May announcement

• This proposal is not yet law and still needs to be tabled.
• This measure is not compulsory. Individuals need to review their situation to assess whether the pension halving/reduction will benefit their unique circumstances.
• The measure will apply to account-based, transition to retirement and term allocated superannuation pensions.

Please keep in mind that there are no guarantees that the temporary minimum pension drawdown relief will be extended into the 2021/22 FY. This is something that we are keeping a close eye on for the benefit of our clients.

If this is something you’d like to take advantage of, please reach out to your Financial Adviser.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.