What should be the pension commencement date on our SMSF documents?

The pension commencement date under our governing rules is the date the member chooses in writing, which does not have to be the first of the month.

With respect to TR 2013/5 Section 12, the Primary conditions are that:

- The commencement date cannot be retrospective to the date on which the application for pension is filed by the member.

- if you establish a commencement date in the deed, then the new commencement date via a written resolution must be after said date.

Q: When a pension commences on 1 July via minutes, but does not get paid for another month, IT can make a big tax difference to clients in pension mode. 

A: According to TR 2013/5, the critical date for tax purposes is the formal commencement date stated in the documents. In this case, it would be July 1st. The delay in payment does not change this commencement date. This means any tax benefits or concessions associated with the pension would be calculated from July 1st, even if the first payment is received later.

Please be advised this is general information only, and is not to be taken as legal advice. If you would like more information, or have a legal query, please contact Abbott & Mourly directly.
Reviewed: 17/01/2024