Document ID: chunk:federal_register_of_legislation:F2024L00664:schedule:13:p22
Version: federal_register_of_legislation:F2024L00664
Segment Type: schedule
Provision Reference: sch 13 (pt 22/23)
Character Range: 295560–298550

payment is not a reversionary income stream then it is treated as if it was the member's income stream.

Supporting information

Defined benefit income cap

The defined benefit income cap is relevant if the payee is either:
    * 60 years of age or over
    * Under 60 years of age and a death benefits dependant, where the deceased died aged 60 or over.

The defined benefit income cap applies if the payee receives one or more superannuation income stream benefits that are 'defined benefit income' to which 'concessional tax treatment' applies. The defined benefit income cap does not have taxation consequences outside of these circumstances.

The defined benefit income cap is an annual cap that is reset, and may be reduced, each year. From 1 July 2017, the 'defined benefit income cap' limits the amount of tax-free income the payee can receive from a capped defined benefit income stream (pension or annuity).

For the 2024-25 financial year, the defined benefit income cap is $118,750 (the $1.9 million general transfer balance cap divided by 16).

Preservation age

The withholding amount varies depending on whether the payee has reached their preservation age when the payment is made.

Preservation age is determined using your payee's date of birth. For example, if a member was born on 1 October 1964, they reach their preservation age of 60 on 1 October 2024.

The table below outlines the transitional period where the preservation age increased progressively from 55 to 60. As the transitional period has been completed, for the 2024-25 and future financial years the preservation age is 60 for all payees born after 30 June 1964. For those payees born before that date, they have already reached their preservation age.

Preservation age by date of birth range
Date of birth       Preservation age
Before 1/7/1960     55
1/7/1960–30/6/1961  56
1/7/1961–30/6/1962  57
1/7/1962–30/6/1963  58
1/7/1963–30/6/1964  59
After 30/6/1964     60

Cap conversion table

The full year cap on defined benefit income streams is $118,750 as of 1 July 2024, and is subject to indexation. The cap may also need to be reduced – see part E.

The table below converts the $118,750 cap into the weekly, fortnightly or monthly equivalent
Total income stream     Annual amount less than $118,750  Annual amount $118,750 or greater
Weekly equivalent       $1 to $2,283                      $2,284 or greater
Fortnightly equivalent  $1 to $4,567                      $4,568 or greater
Monthly equivalent      $1 to $9,895                      $9,896 or greater

Conversion table for income streams commencing during current financial year

The table below can be used to determine the period to use for calculating withholding for income streams that start during the financial year:
Age of payee                            If reversionary death benefit income stream                                     When income stream started                       Calculate portion of income stream