The ATO has reminded SMSFs that, from 1 July 2015, the legislated rise in the ‘preservation age’ (defined in SIS reg 6.01(1)) has come into effect and affects people born after 30 June 1960. If a member turned 55 before 1 July 2015, they qualified for a transition to retirement income stream (TRIS) and the change in preservation age will not affect them. However, this age is now based on date of birth and it applies to anyone born after 30 June 1960. A fund member who turns 55 between 1 July 2015 and 30 June 2016 cannot start a TRIS during the 2015-16 financial year. If born between 1 July 1960 and 30 June 1961, the earliest they can elect to start a TRIS is during the 2016-17 financial year.
The ATO warns that this is a significant change and it is important for SMSF trustees to be aware of the age at which super can be accessed so they don’t accidentally pay benefits to a member who is not eligible.
The ATO has prepared a case study dealing with 3 individuals who are all 60 years old and want to start receiving an income stream from their SMSF.
