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Maria Joven

Jul 05, 2023

Pension Withdrawal/ Personal Contribution

in SMSF Technical Forum

As per the accountant the client has advised him that he forgot to withdraw from his pension account ended 30 June 2023.

Can he still make a withdrawal within 28 days or can the accountant make a journal entries only of the cash withdrwal and another journal entry for personal contribution. Are mere journal entries allowable? Pls advise and thanks in advance.

1 comment

Comments (1)

THE AUDITORS INSTITUTE

Jul 05, 2023

Hi Maria

Thanks, if the required minimum pension has not been met then there is no 28 day rule to pay it nor can a journal be done to take up a pension payment / creditor.

There is an allowance if the pension has been underpaid by less than 1/12th of the minimum.

The Trustee themselves or via the tax agent could request that the ATO considers treating a late paid pension as paid in the required year. (I have been involved in successful requests to the ATO)

Per ATO (-minimum-pension-payment-requirements---frequently-asked-questions):

"If a fund fails to meet the minimum pension payment requirements in an income year, the super income stream will be taken to have ceased at the start of that income year for income tax purposes.”

Refer more guiodance from the ATO at:

https://www.ato.gov.au/Super/Self-managed-super-funds/In-detail/SMSF-resources/SMSF-technical/SMSFs--Minimum-pension-payment-requirements---frequently-asked-questions/#:~:text=End%20of%20example-,What%20is%20a%20small%20underpayment%3F,not%20the%20pro%2Drated%20amount.

Thanks

THE AUDITORS INSTITUTE