SMSF starting pension phase

Say a couple in one SMSF both have commenced pension phase at the very beginning of this financial year, having 100% of their member balances changed from accumulation phase to pension phase commencing 1st July 2017. They wish to have the pension income paid once annually per person.

It says for these ages they need to receive in pension phase:
Age 65-74 - receive 5%
Age 75-79 - receive 6%

1. Does that mean a pension must be paid this financial year on or before 30th June 2018, or since pension phase started 1st July 2017 then the once annual pension is due on or before 30th June 2019?
2. Is the 5%/6% pension calculated on the each members account balance on the commencement day of pension phase, being 1st July 2017 (not EOFY on 30th June 2018)?
3. When is the age calculated? The 1st July of each year?
4. If no pension is due by EOFY, all capital gains & income for this financial year will still be tax free for both members in pension phase, correct?
5. Does the pension received by each person need to be recorded on their personal income tax returns as income?

 

This would require a AFSL and cannot be answered on a forum. It is personal and general financial advice.

Many issues affect this.
How does a pension commence ? Is the fund able to pay a pension that complies ? What happens if it does not comply ? All your questions are relevant but may have other aspects requiring specific advice. Your trust deed says???? A SISA or SISR breach in the year could render a compliant pension to be non-compliant.

1. Minimum pension using SIS Regs must have been paid in the year if the fund is permitted to pay it and the members are eligible. Is the pension reversionary ?
2.Sometimes
3. Financial advice needed as this is member specific. Impacts Centrelink reporting too. I assume no contributions or pensions reset etc.
4.Technically, tax will be payable. (based on the question asked). It could be avoided.
5. Tax advice and financial advice required. Depends if the pension is complying or non-complying

 

I find esuperfund.com.au has a lot of useful info/faq which may assist you to answer your own questions.

For questions regarding pensions SMSF Pension - FAQs | ESUPERFUND

 

I have seen so many people who have self diagnosed and done something which is incorrect, not applicable to their circumstances etc. Makes good preliminary reading but it is a GOOD idea to have an adviser engaged to confirm and assist strategies.

eg Documentation to commence and end a pension, reset a pension, reversionary beneficiaries. And some of these may sometimes require legal assistance eg binding / non-binding nominations, changes to some deeds to reflect changes to members / updating clauses etc

The first warning sign of a DIY fail is when a SMSF is established with human trustees. Its allowed but is a terrible idea.

I would be vary wary of website guidance as it can often be wrong eg

When can I begin to take my Minimum Pension Payment?


You can commence accessing your Minimum Pension Payment at any time after the Pension commencement date nominated in your Pension application. It does not matter if the Pension documentation has not been signed or returned to our office.......
Are they saying an unsigned pension document is still a pension ??? Maybe ?...Just not a complying pension.

That seems to be a non-complying pension. (SIS Reg 1.06) and if the trust deed is old (eg pre 2007 its probably also a concern since the rules of the fund may not even allow a account based pension. So the fund is taxed on its earnings. Member taxed on the pension even if aged 60+
It makes the low cost admin service a bit more expensive.