The $1.6 million cap applies to combined super accounts regardless of whether they are defined benefit (taxed or untaxed) or account based pensions. Special rules apply to the calculations and taxation of defined benefits. Based on a $50,000 annual defined benefit pension payment, the defined benefit may be valued at $800,000, meaning that the remaining cap space for all other super accounts is $800,000.
Some people receiving pensions from public sector funds, where the pension payment for FY17_18 is $100,000 or more and is from an untaxed source (i.e. consolidated revenue), may be subjected to increased tax on that pension receipt to ensure that the tax treatment is comparable to everyone else under the new rules.
Genene Wilson
Senior Financial Planner
Omniwealth
t: 02 9112 4332
m: 0403 026 800
e: genene.wilson@omniwealth.com.au
www.omniwealth.com.au