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Auditors Institute

Oct 29, 2020

Edited: Oct 29, 2020

Pension Payments Paid To Third Parties

in SMSF Technical Forum

I have a fund for audit & it appears the trustees may be paying personal expenses from the fund and recording them as pension payments. I am confirming this with the trustees. However, I may be incorrect but I thought pension payments should be paid into an account held in the name of the particular member. I have reviewed the fund deed and it does not specify anything about this. In my research I found the attached document and on page 2 under the headings "General Requirements" and "Expenses not pertaining to the SMSF" it appears to support my understanding. Please let me have your comments.

Roslyn Arthur

1 answer0 replies

Comments (1)

Auditors Institute

Oct 29, 2020

Roslyn

Many years back (before Year 2000) I sent a private ruling to ATO on this matter - the question was very simple.

If a pensioner goes to a petrol pump and withdraws cash from the ATM from the Pension account and pays for petrol - that is a pension payment

But can the same pensioner pay directly for petrol from the pension account - will that be a pension payment ?

The opinion given to me by ATO was that a pensioner whilst withdrwing a pension can request the trustee to pay another person "Cash" on its behalf - hence a payment directly to the Petrol Pump will be a pension payment.

Manoj Abichandani