Show download pdf controls
  • Improving the integrity of retirement income streams

    Transition to retirement income streams (TRIS) are available to assist members to gradually move to retirement by accessing a limited amount of super. Previously, where a member receives a TRIS, the fund receives tax-free earnings on the super assets that support it.

    Effective 1 July 2017, the government removed the tax-exempt status of earnings from assets that support a TRIS that is not in the retirement phase. Earnings from assets supporting a non-retirement phase TRIS will be taxed at 15% regardless of the date the TRIS commenced.

    Members can no longer treat super income stream payments as lump sums for taxation purposes.

    The intent of this change is to ensure that TRIS are not accessed primarily for tax purposes but for supporting members who remain in the workforce.

    See also:

    Summary of impacts for self-managed super funds

    • Funds can no longer claim exempt current pension income (ECPI) from assets supporting a TRIS if the TRIS is not in the retirement phase.
    • You will need to include income from assets supporting a non-retirement phase TRIS, in assessable income.
    • A TRIS will only be entitled to ECPI where it enters the retirement phase due to the member reaching age 65 or notifying their fund that they have met any of the retirement, permanent incapacity or terminal illness conditions of release.
    • There will be related accounting and reporting changes.
    • There is the potential for movement of assets to be able to comply.
    Last modified: 28 Nov 2017QC 51304