The ATO has called on self-managed funds to check whether they are meeting new pay-as-you-go (PAYG) withholding obligations for capped defined benefit income streams paid to their members.
SMSFs have PAYG obligations to withhold tax from income streams that have been paid to their members in circumstances where:
The member is 60 years or older.
The member is under 60 years and has a death benefit capped defined income stream (where the deceased was 60 years or over when they died).
If you have no tax that you need to withhold from a member’s super, then you are required to provide the individual with a pension payment summary and lodge a PAYG withholding summary with the ATO. This should be done by 14 August, following the end of the financial year that the payment was made.
After COVID 19’s impact on the world, an influx of employees who had lost their jobs fell into the job market. Many of these came from companies that couldn’t afford to continue their employment. As a result, many individuals had to seek alternative employment, or draw from their super. Some individuals took on multiple jobs to pay bills, and others drew from the super that they had accumulated in the government’s early release scheme specifically for coronavirus related income loss.
Super is held by superannuation funds, and accumulates as a result of how much super an employer pays to the employees’ funds. Many Australians may find that they actually possess multiple super accounts as a result of having “lost” their super accounts during changeovers. It can also happen as a result of changing names, moving addresses, living overseas or changing jobs.
Australians can use the ATO’s online tools to:
View details of all of their super accounts, including lost or unclaimed amounts
Consolidate eligible multiple accounts (including any super held by the ATO)
Withdraw your super held by the ATO when certain conditions are met.
As superannuation funds often have fees associated with their upkeep, as well as insurances that may be tied into it (such as life, total and permanent disability and income protection), it’s important to consult with providers before accounts are consolidated.
