Transition to Retirement income Stream Pension – back to their true purpose
The changes to superannuation announced in the 2016 Federal Budget have been passed by Parliament. Amongst the changes was legislation which will remove tax concessions for transition to retirement income stream (TRIS) and bring them closer to their purpose of providing income to members as they transition to retirement.
The new rules will remove the tax exempt status that TRIS have long enjoyed on earnings on fund investments. Assets supporting a TRIS will generally be taxed at 15% from 1 July 2017.
The main issues that you need to consider because of the changes include:
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TRIS are still useful to help you:
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Cut back on work hours and supplement your income with pension payments as you move towards retirement.
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Increase your income with pension payments while you continue in the workforce until a full condition of release is met.
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Reduce your taxable income and increase your superannuation balance without effecting your take home pay through a salary sacrifice arrangement.
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Reviewing your situation to determine if you have met or soon will be eligible to start an account based pension (which has tax-free earnings) instead of a TRIS.
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Determining your eligibility and capacity to make salary sacrifice or deductible contributions pre and post 1 July 2017 will assist in a decision to start or maintain a TRIS.
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If you are concerned that the Government’s changes to transition to retirement pensions will affect you from 1 July 2017, please feel free to contact Hanh On, on 03 9810 0700 or email h.on@banksgroup.com.au to arrange a time to meet so that we can discuss your particular requirements in more detail.