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Lump sum and income stream (pension)

SMSF can pay benefits as a lump sum, a pension or a combination if the payment is under the laws and the trust deed.

Last updated 20 December 2020

A self-managed super fund (SMSF) can pay benefits in the form of a lump sum, an income stream (pension) or a combination of both, provided the payment is allowed under super law and the fund's trust deed.

When you pay a benefit, you need to decide what type of payment it is (lump sum or pension) and the account it will be paid from (if applicable). You need to document this at the time the payment is requested. You can record it in trustee minutes.

You have to withhold tax from benefit payments to members who are:

  • under 60 years old
  • under 60 years old and your member receives a reversionary capped defined benefit income stream, where the deceased was 60 years or over when they died
  • 60 years old or over if the benefit is from a capped defined benefit income stream.



Duration 2:27. A transcript of Planning for retirement is also available.

See also:

Check if your fund allows a lump sum, a member may be paid all or some of their super benefit as a single payment.

SMSF can pay benefits to a member as an income stream (pension) if the member has met one of the conditions of release.

SMSFs may have PAYG withholding obligations when paying retirement income streams (pensions) to members.