An important announcement from the ATO for those for those under 60 years of age.
If you are considering receiving a super income stream (this includes transition-to-retirement income streams (TRIS) and disability income streams paid from super), or you are considering a super income stream after 1 July 2017, please note this announcement.
If you are receiving a super income stream, and normally would have chosen to treat this stream as a lump sum for tax purposes, you will no longer have access to the super lump sum low rate cap for payments in your income stream. As a result of this, the amount of tax you will pay on your super income stream may change.
Super lump sums up to or below $195,000 are tax-free only until 1 July 2017. The removal of this option from that day onwards means you can no longer treat pension payments as lump sums for tax purposes. These payments will be taxed as income statement benefits instead – under the PAYG rules, y0u may pay more tax as a result.
For more information on this change, check out the ATO’s post on the matter.