A. If eligible, the Age Pension provides an income and access to a range of concessions in retirement. The Government makes a regular payment that can supplement your super and any other income you receive.
For the assets test, 100% of the amount of money you use to start your MTAA Super Pension or an MTAA Super TTR Pension is assessable.
New account-based pensions have new deeming rules for income test purposes from 1 January 2015, which assume your financial assets earn a certain amount of income, regardless how much they actually earn.
We have only provided general information about social security laws in this section. For more information, contact Centrelink. We also recommend you seek financial advice to find out how social security laws apply in your personal circumstances.
A. You can choose how often you would like to receive your pension: fortnightly, monthly, quarterly, half-yearly or yearly.
If you receive your pension fortnightly, payments will be made every second Friday. Otherwise, payments are made on the 28th of the month in which the payment falls due. If the 28th day is a weekend or public holiday, you will be paid the preceding business day.
You’re required to receive at least one payment each financial year, but if you start your pension after 1 June in any financial year, you can start your pension payments in the next financial year.
Q. Can I make contributions to my pension account?
A. You can’t contribute to your pension account once it has commenced. To combine any additional contributions to your existing pension account balance you would need to open a new account.
It’s important to check that your Government entitlements (Note that Government changes to deeming rules could affect you if you choose to close your current account and open a new one. To find out whether your entitlements – including the age pension – could be reduced, we recommend speaking to an expert first. You can find help on our advice page.)
Q. How is my account taxed?
A. Generally, when you open a pension account, you will not pay tax on rollovers (unless the amount includes an untaxed element).
You may pay tax if you use money from outside the super system to open your pension.
Any investment earnings on your MTAA Super pension account are tax free in the retirement phase. Investment earnings are taxed at up to 15% for TTR pensions.
If you’re age 60 or over and have met a condition of release, you can withdraw your super tax free.
If you are under age 60, the tax you pay will depend on:
your age at the time of withdrawal
the tax components of your benefit
whether we have your Tax File Number
whether you are an Australian resident
the circumstances under which your benefit is withdrawn (for example, concessions apply if you are disabled), and
whether your benefit is paid as a lump sum or an income stream.
Tax payable on the taxed element of your lump sum benefit
Component and tax treatment
60 or over
Preservation age (generally age 55 to age 59)
Tax-free component1 is tax-free
The first $215,0003 is tax free. The amount above $215,000 is taxed at 15% plus the applicable levies.
Less than preservation age
Tax-free component1 is tax free.
Taxable component2 is taxed at 20% plus the applicable levies.
1 The tax-free component consists of amounts such as the accumulation of non-concessional contributions, pre-1983 components and invalidity components. If you would like more information about these components call us on 1300 362 415. 2 The taxable component consists of the balance after subtracting the tax-free component. It generally comprises amounts such as the accumulation of concessional contributions and the post-1983 component. If you would like more information about these components, call us on 1300 362 415. 3 The $215,000 benefit limit is indexed in line with Average Weekly Ordinary Time Earnings (AWOTE) each year in $5,000 increments. This limit applies to all benefits received from any complying super fund.
If your benefit includes an untaxed element (such as insurance proceeds), a higher rate of tax may be applicable.
Q. What happens to my money in the event of my death?
A. Reversionary Beneficiary
You can nominate a reversionary beneficiary to continue receiving pension payments in the event of your death. You also have the choice of nominating a beneficiary to receive the remaining balance as a lump sum.
You can nominate one or more dependants or your legal personal representative as the beneficiaries of your death benefit. Your dependants may include your spouse, children, or others as outlined in the definitions on the following page.
If you nominate your legal personal representative, then he or she may distribute the benefit in accordance with your Will or, where there is no valid Will, the applicable intestacy laws.
To make a nomination
You need to nominate your reversionary beneficiary at the time you open a pension account by completing the relevant section of the Pension Application Form. Once your account is open, you can’t change your reversionary beneficiary. To make a change, you would need to close your pension account and open a new one.
There are rules around who you can nominate as your reversionary beneficiary. This person must be one of the following:
your child who is under 18
your child who is between 18 and 25 and financially dependent on you
your disabled child (see section 8(1) of the Disability Services Act)
anyone financially dependent on you.
In the event of your death, your reversionary beneficiary will continue to receive your pension payments. Tax may apply to these payments.
Q. What is a Transition to Retirement (TTR) Pension account?
A. Under the transition to retirement rules, you can continue to work and contribute to your super while you supplement your take-home pay with income from your pension
To be eligible, you must have reached your preservation age and still be working or intend on returning to work.
A TTR Pension can be a useful way to:
Top up your take home pay while you reduce your work hours As you ease into retirement, you may want to reduce your working hours and move to part-time work. With a MTAA Super TTR Pension, you can draw on your super savings to help top up the difference in your take-home pay and maintain your lifestyle.
Add extra to your super in the years before you retire
While you’re working and your super account remains open, you can continue to receive employer contributions to your super. You can increase your salary sacrifice contributions (up to your contributions cap) to give your super a boost before you retire, and then draw payments from your MTAA Super TTR Pension to top up your take-home pay.