New ATO requirements when a SMSFs sets up an account-based pension

Financial Planner

By Erryn Langley

Back in 2013, the Australian Taxation Office (ATO) issued a Taxation Ruling that addressed the rules around paying pensions.

While the Ruling applied to all superannuation funds, there are specific implications for SMSFs. On the surface, SMSFs appear to have additional flexibility when compared to APRA regulated funds.

Firstly, it is quite a common practice for the commencement of a pension to be backdated to an earlier date, often the previous 1 July. This may be for administrative simplicity or because the member balance at the end of the previous financial year is not available due the financial statements not having been prepared.

However, when considering the Taxation Ruling, and particularly paragraph 12, while a pension may commence before the first income payment is made, it cannot commence before a member has made a request or application for a pension to commence.

We recommend members requests to commence a pension should always be in writing or using an application form provided by the trustees of the superannuation fund, the fund’s administrator, or the fund’s document provider. The request should always be made before the pension commences.

The practice of backdating the commencement of a pension from a SMSF became more complex with the introduction of the transfer balance cap.

While some SMSFs have historically been able to provide their transfer balance account reporting when the fund submits its statutory return, this will change from 1 July 2023.

From 1 July 2023, all SMSFs will be required to lodge transfer balance account reporting by the 28th day of the month following the end of the quarter in which the reportable event (e.g. commencement, reversion, or commutation of a pension) occurs.

The ATO has advised that all unreported events that have occurred by 30 September 2023 must be reported by 28 October 2023. Likewise, for pensions that commence in the first quarter of the 2024 financial year (e.g. on 1 July 2023) will also need to be reported by 28 October 2023. authorised adviser for the most up-to-date information. No warranty is given in respect of the information provided and accordingly neither Alliance Wealth nor its related entities, employees or representatives accepts responsibility for any loss suffered by any person arising from reliance on this information.

On a final note, when a SMSF commences to pay a pension to a member, the trustee needs to provide the member with a product disclosure statement that provides details of the pension being paid. Most SMSF document providers have a PDS specific to their trust deed.

Lactation Consultant

By Dr. Joanna Strybosch

Tattooing has become a popular form of self-expression and body art. With an increasing number of people getting tattoos, there are some important considerations for individuals who are planning to breastfeed or are already breastfeeding. While there are potential risks associated with tattooing, it is possible to safely navigate the process without compromising the well-being of mother or baby.

Timing and Healing:

If you're considering getting a tattoo while breastfeeding, timing is crucial. It's generally recommended to wait until your baby is at least six months old before getting a tattoo. By this time, your breastfeeding routine and milk supply would be well-established, reducing any potential disruptions caused by the healing process.

Safety and Hygiene:

When getting a tattoo, prioritising safety and hygiene is essential, especially when breastfeeding. Ensure that you choose a reputable tattoo studio that follows strict sterilization practices and uses disposable, single-use needles. This helps minimize the risk of infection and ensures a safe environment for both you and your baby.

Make sure to communicate your breastfeeding status with your tattoo artist beforehand, as they may have additional recommendations or precautions based on their expertise and experience.

Placement Considerations:

While there are no specific restrictions on tattoo placement for breastfeeding mothers, it's worth considering the potential impact on your comfort and convenience. For instance, if you plan to get a tattoo on your breast or areola area, it's advisable to wait until after you've finished breastfeeding. Changes in breast size and shape during lactation could distort the tattoo or lead to undesirable outcomes.

Choosing a different location for your tattoo, such as the arms, legs, or back, can help ensure that your breastfeeding journey remains unaffected while still allowing you to enjoy your body art.

Ink and Allergies:

Some individuals may be concerned about potential risks associated with tattoo ink and breastfeeding. While rare, allergic reactions to tattoo ink can occur.