Document ID: chunk:federal_register_of_legislation:F2018L00775:body:0:p1
Version: federal_register_of_legislation:F2018L00775
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Legislative Instrument

PAYG Withholding variation to the rate of withholding for superannuation income stream beneficiaries who turn 60 during the financial year

I, Deborah Anne Jenkins, Deputy Commissioner of Taxation, make this instrument under section 15-15 of Schedule 1 of  the Taxation Administration Act 1953.

Deputy Commissioner of Taxation

Dated: 31 May 2018

   1. Name of instrument
  This instrument is the PAYG Withholding variation to the rate of withholding for superannuation income stream beneficiaries who turn 60 during the financial year.

  2.     Effective dates
  This instrument commences on 1 July 2018.

  3.     Application
  This instrument applies to the taxed element of the taxable component of payments that:
        1. are superannuation income streams covered by paragraph 12-80(a) of  Schedule 1 to the Taxation Administration Act 1953
        2. consist of a taxed element only
        3. are paid to a payee who is aged 59 years on 30 June immediately before the start of the relevant financial year; and
        4. do not exceed the defined benefit income cap.

  The amount to be withheld from the taxable component of these payments is the amount calculated using the following rules.

RULES FOR CALCULATING VARIED WITHHOLDING AMOUNT

Step 1

Calculate the amount of assessable income the payee will receive before their 60th birthday.

Assessable income before 60th birthday = (taxable component of the payment x number of payments before 60th birthday)

where:

      * the taxable component of a superannuation income stream benefit is the amount of the income stream minus the tax free component of the benefit,

    and

      * the number of payments before 60th birthday is the number of payments expected to be made to the payee between 1 July and their 60th birthday.

Step 2

Turn the Assessable income before 60th birthday (Step 1) into an average payment per pay period, as if spread over whole year.

Assessable income before 60th birthday / total number of payments in the year

Total number of payments made for the year:

      * 52, for payments made weekly
      * 26, for payments made fortnightly; or
      * 12, for payments made monthly.

The result is the payee's Adjusted average payment.

Step 3

Convert the Adjusted average payment calculated in Step 2 to its weekly equivalent. Where the payments are made weekly, ignore any cents and add 99 cents.

If the payments are made fortnightly or monthly, calculate the weekly equivalent using the following:

     * fortnightly payments - divide the sum of the fortnightly payment by two. Ignore any cents in the result and then add 99 cents.

   or

     * monthly payments - multiply the monthly payment by 3 and then divide by 13. Ignore any cents in the result and then add 99 cents.

Step 4

Calculate the withholding