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Retirement phase income streams

Introduction to superannuation income streams

Section: 16.1

A retirement income stream provides a series of periodic payments that may assist in meeting income needs in retirement.

When paid from accrued superannuation benefits, a superannuation income stream can be paid to either the member (subject to preservation requirements) or one or more eligible dependants following the member's death. A superannuation income stream cannot be paid to an estate.

A superannuation income stream may be commenced within the same fund in which those benefits accrued or purchased with a super rollover benefit.

There are two providers of superannuation income streams:

  • superannuation funds which provide pensions
  • life insurance companies which provide annuities.

Under superannuation law, there is very little difference between pensions and annuities. They have similar payment standards and taxation treatment.

Superannuation income streams receive concessional taxation treatment including tax free earnings on assets supporting the income stream, where they meet the definition of a 'retirement phase income stream'  and meet relevant SIS standards.

The amount of superannuation that can be transferred to retirement phase income streams is limited by the transfer balance cap

Last modified: Wednesday, July 24, 2019