Retirement

In the 2006 Federal Budget the Government announced significant changes designed to simplify and streamline superannuation.  Some changes took effect in 2006-07, but most took effect from 1 July 2007. 'The new superannuation rules for retirees' flyer (PDF 314KB) gives you a snapshot of the key changes. They include:

• No tax after age 60 from a taxed superannation fund, regardless of whether you take your benefit as a lump sum or convert it to an income stream
• Reasonable Benefit Limits (RBLs) abolished so there’s no longer any penalties for accumulating large amounts is super
• You can stay in super as long as you like, there’s no longer a requirement to cash out of super after 65 if you’re no longer working (this took effect 10 May 2006)
• Tax component changes. If you are able to and choose to access your super prior to age 60, there may be a tax liability. But now there are only 2 tax components: a Tax free component and a Taxable component.
• Pension minimums are calculated differently and there’s no longer a maximum. The minimum amount you need to take from your pension product is generally now calculated as a percentage of your account balanced based on age.  And for most pension products now, there’s no maximum annual payment limit. 
• Death benefits as pensions can only be paid to tax dependants.  
• Centrelink changes to pension assets test taper rate.  From 20 September 2007, the rate will halve, meaning people previously unable to access the Age Pension may in fact be able to.