SMSF benefit payments

Over the five years to 30 June 2013, benefit payments from SMSFs averaged $20.5 billion a year (see appendix 1, table 5). Benefit payments, like other financial trends over the period, saw a fall in 2009, most likely due to economic circumstances, but have since increased each year to $26.4 billion in 2013. SMSF members receiving benefit payments also increased by 44%.Footnote12

Average benefit payments per fund increased by 6%, and the median benefit payment by 5% over the period. In 2013, the average benefit payment increased to $108,000, and median payment to $54,000.

In 2013, 82% of all benefit payments were in the form of a pension, an increase from 67% in 2009. This increase was largely due to a rise of 11% in 2013 pension payments, mainly as a result of improved data collection from the 2013 SAR, with label changes made to better capture the types of benefit payments made to SMSF members.Footnote13

Transition-to-retirement income streams have steadily increased from 9% of all benefit payments in 2009 to 11% in 2013. Similarly, of SMSF members in receipt of a benefit payment, the proportion reporting transition-to-retirement income streams increased to 20% in 2013.

The average benefit payment per member in 2013 was $67,000, and approximately 7% of the average member balance (see appendix 1, table 5). This has steadily increased since 2010. However, it was slightly lower than the $68,000 and 8% of average member balance in 2009.

Over the five-year period, members in the 55–59 age range reported the lowest average benefit payment of $41,000. The highest average benefit payment of $70,000 has shifted from members aged 65–69 years in 2009 to 2011, to $75,000 for those 75 years and over from 2012.

The majority of members receiving benefit payments were aged 60–69, with the proportion decreasing slightly over the period to 60% in 2013. Conversely, there was an increase in the proportion of members aged 70 years and over receiving benefit payments, from 21% in 2009 to 29% in 2013.

Over the five-year period, there was a shift in the age demographic of members receiving benefit payments, with a decrease in the proportion of members 64 years and under corresponding with an increase to those 65 years and over (by 11%).

Footnote 12

Based on 2009–2013 SAR lodged data.

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Footnote 13

A pension payment refers to payments made to members in retirement. For further information on label changes, refer to the 2013 SMSF annual return instructions available on the ATO website.

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    Last modified: 15 Dec 2014QC 43403