Forman Financial Services

Financial Year 2022-23 Pension

Minimum pension payments

It is important to reconcile all pension payments received from retirement income streams to ensure that there is no underpayment of the minimum pension payment required by 30 June 2023. Where this requirement is not met, an SMSF may be subject to 15% tax on income generated by pension assets instead of being tax free and the member’s Transfer Balance Account (TBA) will be impacted.

Account based pensions paid in 2022/23 benefit from the Government’s temporary 50% reduction in the minimum drawdown requirements. This reduction also applies to the minimum amount calculated under the usual methodology for market linked pensions under Schedule 6 of the SIS Regulations. From 1 July 2023 the standard minimum drawdown requirement will be reinstated for all account-based pensions.

The table below outlines the relevant drawdown requirements for account-based pensions and transition to retirement income streams.

Age Temporary 50% reduced

minimum withdrawal rate


Standard minimum %

withdrawal rate


Under 65 2% 4%
65 – 74 2.25% 5%
75 – 79 3% 6%
80 – 84 3.5% 7%
85 – 89 4.5% 9%
90 – 94 5.5% 11%
95 or older 7% 14%


All pension withdrawals for 2022/23 must be paid (in cash) by 30 June 2023 and cannot be accrued or adjusted using a journal entry – so it is important to attend to this as soon as possible. For example, if you intend to make pension payments via an electronic transfer, it is important to ensure that online transfers show the money coming out of a fund’s bank account by no later than 30 June 2023.

For persons that commenced their account-based pension on or after 1 June 2023, a minimum annual payment does not need to be made in 2022/23.

Note: With the indexation of the general TBC on 1 July 2023 to $1.9m, some individuals may opt to defer the start of a retirement phase income stream to benefit from the $200,000 increase or to be able to access a proportional increase based on their unused TBC percentage.


Lump sum withdrawals vs pension payments

If a person intends to withdraw more than their annual minimum payment before 30 June 2023, it may not be too late to consider withdrawing this additional amount as a lump sum withdrawal instead. Pension payments from an account-based pension have no impact on a member’s TBA, whereas a lump sum withdrawal (i.e. a partial commutation) creates a ‘debit’ and reduce a member’s TBA, creating space in the member’s TBC.

To ensure that the lump sum withdrawal passes any scrutiny of the ATO, any decision to partially commute an income stream should be made before the payment is received, otherwise there is a risk that the ATO will classify the withdrawal as a pension payment.


Transfer Balance Account Reporting

Obligations for SMSFs relating to the lodgement of the Transfer Balance Account Report (TBAR) are set to change on 1 July 2023. From 1 July 2023, the ATO is removing the TSB threshold and requiring all SMSFs to report 28 days after the end of the quarter in which the event occurred.

Even trustees that have been eligible to report annually will need to get ready for quarterly reporting as of 1 July 2023. The obligation to report quarterly will also apply to any reportable events that occurred in 2022/23. Trustees will be required to lodge a TBAR to report these events, no later than 28 October 2023.

It is important to be aware that the obligation to report more frequently than quarterly, continues to apply where:

  • an income stream is commuted in response to an excess transfer balance determination. The trustee must lodge a TBAR within 10 business days after the end of the month in which the commutation occurred; and
  • the trustee responds to a commutation authority. The trustee must lodge a TBAR within 60 days of the issue date on the commutation authority.

For better management of an individual’s TBC, SMSF trustees may choose to report transfer balance account events more frequently, particularly where a member rolls over their interest from an SMSF to an APRA fund.

Note:  From 1 July 2023, all SMSFs must report transfer balance account events 28 days after the end of the quarter in which the event occurred (i.e. 28 Jan, 28 April, 28 July, 28 October).


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Disclaimer and Warning
The information above is of a general nature only.  It should not be used as a source to make financial decisions.  It’s also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status.  We recommend that if you are looking for advice on this matter, you should contact us.