Partners Wealth Group director, SMSF consulting and auditing, Martin Murden said the changes to the deeming rule for the age pension will have significant implications for Centrelink benefits, for example.
“With a little over four months to go before the changes take effect, affected clients need to consider their options and take action immediately,” Mr Murden said.
“Unfortunately, some super pensions - and no one knows exactly how many - do not make provision for reversionary pensioners because of the negative impact this could have on Centrelink benefits,” he added.
Over the years it has become common practice for trustees of SMSFs to establish the pension without a reversionary pensioner.
“On the death of the pensioner, provided he or she was survived by a spouse or partner, the survivor simply opted to commence a new pension with the death benefit,” Mr Murden said.
“Under the new rules, a new pension is not grandfathered. Instead, it is automatically subject to the new deeming rules, which will impact on the income test irrespective of the amount of pension taken.”
Mr Murden said that to ensure entitlements to Centrelink are not lost, SMSF pensioners who qualify to have their pensions grandfathered under the current rules should review their pension documentation to determine whether a reversionary pensioner has been nominated.
“If there is no such nomination or the documents cannot be located, we would suggest pensioners ask their advisers to review the pension arrangements and make changes where appropriate,” Mr Murden said.