PART 6
-
PAYMENT STANDARDS
Division 6.3
-
Cashing of benefits
Subdivision 6.3.1
-
Regulated superannuation funds
REGULATION 6.21
COMPULSORY CASHING OF BENEFITS IN REGULATED SUPERANNUATION FUNDS
6.21(1)
Subject to subregulation
(3)
, a member
'
s benefits in a regulated superannuation fund must be cashed as soon as practicable after the member dies.
History
Reg 6.21(1) substituted by SLI No 74 of 2007, reg 5 and Sch 3 item 47, effective 1 July 2007. Reg 6.21(1) formerly read:
6.21(1)
Subject to subregulation (3), a member
'
s benefits in a regulated superannuation fund (other than the member
'
s post-65 employer-financed benefits) must be cashed as soon as practicable after the occurrence of any of the following events:
(a)
the member:
(i)
has attained age 65 but not age 75; and
(ii)
is not gainfully employed to at least a part-time equivalent level;
(b)
the member:
(i)
had, on 30 June 2004, reached age 75; and
(ii)
has not, since 1 July 2004, continued to be gainfully employed for at least 30 hours a week;
(c)
the member has reached age 75, and the member
'
s 75th birthday occurs on or after 1 July 2004;
(d)
the member dies.
Reg 6.21(1) amended by SR No 349 of 2004, reg 3 and Sch 1 item 1, by substituting para (c), effective 1 July 2004. Para (c) formerly read:
(c)
the member has reached age 75, and is not a person to whom paragraph (b) applies;
Reg 6.21(1) amended by SR No 148 of 2004, reg 3 and Sch 1 items 4 and 5, by substituting
"
to at least a part-time equivalent level;
"
for
"
on either a full-time or part-time basis;
"
in para (a)(ii) and substituting paras (b), (c) and (d) for paras (b) and (c), effective 1 July 2004. Paras (b) and (c) formerly read:
(b)
the member:
(i)
has attained age 75; and
(ii)
is not gainfully employed on a full-time basis;
(c)
the member dies.
Reg 6.21(1) amended by SR No 150 of 2002, reg 3 and Sch 1 item 10, by substituting
"
75
"
for
"
70
"
in para (a)(i) and (b)(i), effective 1 July 2002.
Reg 6.21(1) amended by SR No 117 of 1997 and SR No 189 of 1994.
6.21(1A)
(Repealed by SLI No 74 of 2007)
History
Reg 6.21(1A) repealed by SLI No 74 of 2007, reg 5 and Sch 3 item 48, effective 1 July 2007. Reg 6.21(1A) formerly read:
6.21(1A)
Subject to subregulation (3), a member
'
s post-65 employer-financed benefits in a regulated superannuation fund must be cashed as soon as practicable after the occurrence of any of the following events:
(a)
where:
(i)
the member has reached age 65 but not age 75; and
(ii)
the member is not gainfully employed to at least a part-time equivalent level; and
(iii)
mandated employer contributions have ceased to be made, and are not liable to be made, in respect of the member to:
(A)
the fund; or
(B)
another regulated superannuation fund; or
(C)
an RSA; or
(D)
an EPSSS;
(b)
where:
(i)
the member has attained age 75; and
(ii)
(Repealed by SR No 148 of 2004)
(iii)
mandated employer contributions have ceased to be made, and are not liable to be made, in respect of the member to:
(A)
the fund; or
(B)
another regulated superannuation fund; or
(C)
an RSA; or
(D)
an EPSSS;
(c)
where the member dies.
Reg 6.21(1A) amended by SR No 148 of 2004, reg 3 and Sch 1 items 6 and 7, by substituting
"
to at least a part-time equivalent level;
"
for
"
on either a full-time or part-time basis;
"
in para (a)(ii) and repealing para (b)(ii), effective 1 July 2004. Para (b)(ii) formerly read:
(ii)
the member is not gainfully employed on a full-time basis; and
Reg 6.21(1A) amended by SR No 150 of 2002, reg 3 and Sch 1 item 10, by substituting
"
75
"
for
"
70
"
in para (a)(i) and (b)(i), effective 1 July 2002.
Reg 6.21(1A) amended by SR No 14 of 1999 and inserted by SR No 117 of 1997.
[
CCH Note: MODIFICATION DECLARATION No 24
states that subregulations
6.21(1)
and
6.21(1A)
of the Regulations are to have effect in relation to trustees and members of superannuation entities as if they were modified by inserting after subregulation
6.21(1A)
:
(1B)
During the period 1 July 2004 to 30 June 2005, the benefits of a member (including a member
'
s post-65 employer-financed benefits) are not required to be cashed in accordance with paragraph
6.21(1)(a)
or
6.21(1A)(a)
.
(1C)
A trustee
'
s failure to cash a member
'
s benefits (including a member
'
s post-65 employer-financed benefits) in accordance with paragraph
6.21(1)(a)
or
6.21(1A)(a)
during the period 1 July 2004 to the date of commencement of Modification Declaration No 24 is not a breach of those paragraphs.
This Declaration commences on the date it is signed.
Dated 2 May 2005
Interpretation
In this Declaration
Act
means the
Superannuation Industry (Supervision) Act 1993
.
APRA
means the Australian Prudential Regulation Authority.
Regulations
means the
Superannuation Industry (Supervision) Regulations 1994
.
]
[
Modification declaration No 3 of 2006
(No 3 of 2006, registered on and effective from 30 June 2006).
Regulation 6.21 is to have effect in relation to trustees and members of superannuation entities as if it was modified, by inserting after subregulation 6.21(1C) (as inserted by Modification Declaration No 24):
6.21(1D)
During the period 10 May 2006 to 30 June 2007:
(i)
a member
'
s benefits in a regulated superannuation fund (other than the member
'
s post-65 employer-financed benefits) are not required to be cashed in accordance with paragraphs 6.21(1)(a), 6.21(1)(b) or 6.21(1)(c); and
(ii)
a member
'
s post-65 employer-financed benefits are not required to be cashed in accordance with paragraphs 6.21(1A)(a) or 6.21(1A)(b).
6.21(1E)
The cashing of a member
'
s benefits (including the member
'
s post-65 employer-financed benefits) by a trustee during the period 10 May 2006 to the date of registration of this modification declaration is not a breach of regulation 6.21 as modified.
]
6.21(2)
The form in which benefits may be cashed under this regulation is any one or more of the following forms:
(a)
in respect of each person to whom benefits are cashed:
(i)
a single lump sum; or
(ii)
an interim lump sum (not exceeding the amount of the benefits ascertained at the date of the event mentioned in subregulation
(1)
) and a final lump sum (not exceeding the balance of the benefits as finally ascertained in relation to the event);
(aa)
a series of payments, each of which is a payment of a superannuation lump sum mentioned in paragraph
301-275(1)(b)
of the 1997 Tax Act;
(b)
subject to subregulations
(2A)
and
(2B)
:
(i)
1 or more pensions, each of which is a superannuation income stream that is in the retirement phase;
(ii)
the purchase of 1 or more annuities, each of which is a superannuation income stream that is in the retirement phase.
(c)
(Repealed by SLI No 74 of 2007)
History
Reg 6.21(2) amended by FRLI No F2023L00846, reg 4 and Sch 1 item 4, by inserting para (aa), effective 24 June 2023. For application provision, see s
14.35
.
Reg 6.21(2) amended by FRLI No F2017L00321, reg 4 and Sch 1 items 22 and 23, by inserting
"
, each of which is a superannuation income stream that is in the retirement phase
"
in para (b)(i) and (ii), applicable on and after 1 July 2017.
Reg 6.21(2) amended by SLI No 74 of 2007, reg 5 and Sch 3 items 49 and 50, by substituting para (a)(ii), and substituting para (b) for paras (b) and (c), effective 1 July 2007. Paras (a)(ii), (b) and (c) formerly read:
(ii)
an interim lump sum (not exceeding the amount of the benefits ascertained at the date of an event mentioned in subregulation (l) or (1A)) and a final lump sum (not exceeding the balance of the benefits as finally ascertained in relation to the event).
(b)
a pension or 2 or more pensions;
(c)
the purchase of an annuity or 2 or more annuities.
Reg 6.21(2) amended by SR No 83 of 1998 and SR No 189 of 1994.
6.21(2A)
If a member dies on or after 1 July 2007, subparagraphs
(2)(b)(i)
and
(ii)
apply to an entitled recipient only if, at the time of the member
'
s death, the entitled recipient:
(a)
is a dependant of the member; and
(b)
in the case of a child of the member:
(i)
is less than 18 years of age; or
(ii)
being 18 or more years of age:
(A)
is financially dependent on the member and less than 25 years of age; or
(B)
has a disability of the kind described in subsection 8(1) of the
Disability Services Act 1986
.
History
Reg 6.21(2A) inserted by SLI No 74 of 2007, reg 5 and Sch 3 item 51, effective 1 July 2007.
6.21(2B)
If benefits in relation to a deceased member are being paid to a child of the deceased member in the form of a pension or an annuity in accordance with subregulation
(2A)
, the benefits must be cashed as a lump sum on the earlier of:
(a)
the day on which the annuity or pension is commuted, or the term of the annuity or pension expires (unless the benefit is rolled over to commence a new annuity or pension); and
(b)
the day on which the child attains age 25;
unless the child has a disability of the kind described in subsection 8(1) of the
Disability Services Act 1986
on the day that would otherwise be applicable under paragraph
(2B)(a)
or
(b)
.
History
Reg 6.21(2B) inserted by SLI No 74 of 2007, reg 5 and Sch 3 item 51, effective 1 July 2007.
6.21(3)
For the purposes of subregulation
(1)
, it is sufficient if, instead of being cashed, the benefits are rolled over as soon as practicable for immediate cashing.
History
Reg 6.21(3) inserted by SLI No 74 of 2007, reg 5 and Sch 3 item 52, by substituting
"
subregulation (1)
"
for
"
subregulations (1) and (1A)
"
, effective 1 July 2007.
Reg 6.21(3) amended by SR No 117 of 1997 and inserted by SR No 189 of 1994.
6.21(3A)
(Repealed by SLI No 74 of 2007)
History
Reg 6.21(3A) repealed by SLI No 74 of 2007, reg 5 and Sch 3 item 53, effective 1 July 2007. Reg 6.21(3A) formerly read:
6.21(3A)
For subregulations (1) and (1A), after the member turns 65 years:
(a)
the trustee of the fund must make reasonable attempts to keep itself informed about the member
'
s ongoing employment status; and
(b)
if the trustee of the fund cannot find out the member
'
s ongoing employment status, the member is taken not to be gainfully employed.
Reg 6.21(3A) inserted by SR No 175 of 1998.
6.21(4)
(Repealed by SLI No 74 of 2007)
History
Reg 6.21(4) repealed by SLI No 74 of 2007, reg 5 and Sch 3 item 53, effective 1 July 2007. Reg 6.21(4) formerly read:
6.21(4)
Benefits in a regulated superannuation fund that were post-65 employer-financed benefits in the source from which they were received continue to be post-65 employer-financed benefits in that fund.
Reg 6.21(4) inserted by SR No 117 of 1997.
6.21(5)
(Repealed by SLI No 74 of 2007)
History
Reg 6.21(5) repealed by SLI No 74 of 2007, reg 5 and Sch 3 item 53, effective 1 July 2007. Reg 6.21(5) formerly read:
6.21(5)
In this regulation:
"
post-65 employer-financed benefits
"
, in relation to a member of a regulated superannuation fund as at a particular date, means the sum of:
(a)
the amount of the mandated employer contributions made to the fund in respect of the member in respect of the period commencing when the member reached age 65 and ending on that date; and
(b)
the amount of the mandated employer contributions made to another regulated superannuation fund or to an EPSSS or an RSA in respect of the member in respect of that period, if the benefits arising in respect of those contributions were transferred or rolled over to the fund during that period; and
(c)
the amount of the investment earnings on those amounts during that period;
less the costs applicable to those amounts during that period.
Reg 6.21(5) amended by SR No 14 of 1999 and inserted by SR No 117 of 1997.
6.21(6)
(Repealed by SLI No 74 of 2007)
History
Reg 6.21(6) repealed by SLI No 74 of 2007, reg 5 and Sch 3 item 53, effective 1 July 2007. Reg 6.21(6) formerly read:
6.21(6)
In this regulation a person is gainfully employed at a
part-time equivalent level
if the person was gainfully employed for at least 240 hours during the financial year that ended on the last occurring 30 June.
Reg 6.21(6) inserted by SR No 148 of 2004, reg 3 and Sch 1 item 8, effective 1 July 2004.
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