There are specific rules regarding paying SMSF benefits to members.

Conditions for paying benefits

As a trustee, the rules for paying benefits to members are important, so you know when and how they can be paid. These rules are set out in:

•  your fund’s trust deed
•  the super laws (referred to as ‘payment standards’).

A member can only access all or part of their super benefits if they meet one of the conditions of release specified in the super laws.

If your fund’s governing rules allow it, you can generally pay a super benefit as:

• a lump sum
• an income stream (pension or annuity)
• a combination of both.

Make sure all decisions for payment of benefits are properly documented and you comply with any reporting and administrative requirements, such as:

• registering for pay as you go (PAYG) withholding
• issuing payment summaries
• obtaining actuary certificates.

It is possible for your fund to pay super benefits and still have members contributing to it, as long as certain conditions are met.

ProAdvisory is a licensed financial adviser and Accountant and can help you ensure you meet the conditions for paying benefits to members.

More information: Contact the SMSF expert ProAdvisory.