Supporting information

Defined benefit income cap

The defined benefit income cap is relevant if the payee is either:

• 60 years of age or over
• under 60 years of age and a death benefits dependant, where the deceased died aged 60 or over.

The defined benefit income cap applies if the payee receives one or more superannuation income stream benefits that are 'defined benefit income' to which 'concessional tax treatment' applies. The defined benefit income cap does not have taxation consequences outside of these circumstances.

The defined benefit income cap is an annual cap that is reset, and may be reduced, each year. From 1 July 2017, the ‘defined benefit income cap’ limits the amount of tax-free income the payee can receive from a capped defined benefit income stream (pension or annuity).

For the 2024-25 financial year, the defined benefit income cap is $118,750 (the $1.9 million general transfer balance cap divided by 16).

For more information, see Law Companion Ruling LCR 2017/1.

Preservation age

The withholding amount varies depending on whether the payee has reached their preservation age when the payment is made.

Preservation age is determined using your payee’s date of birth. For example, if a member was born on 1 October 1964, they reach their preservation age of 60 on 1 October 2024.

The table below outlines the transitional period where the preservation age increased progressively from 55 to 60. As the transitional period has been completed, for the 2024-25 and future financial years the preservation age is 60 for all payees born after 30 June 1964. For those payees born before that date, they have already reached their preservation age.

Preservation age by date of birth range

Date of birth	Preservation age
Before 1/7/1960	55
1/7/1960–30/6/1961	56
1/7/1961–30/6/1962	57
1/7/1962–30/6/1963	58
1/7/1963–30/6/1964	59
After 30/6/1964	60

Cap conversion table

The full year cap on defined benefit income streams is $118,750 as of 1 July 2024, and is subject to indexation. The cap may also need to be reduced – see part E.

The table below converts the $118,750 cap into the weekly, fortnightly or monthly equivalent

Total income stream	Annual amount less than $118,750	Annual amount $118,750 or greater
Weekly equivalent	$1 to $2,283	$2,284 or greater
Fortnightly equivalent	$1 to $4,567	$4,568 or greater
Monthly equivalent	$1 to $9,895	$9,896 or greater

Conversion table for income streams commencing during current financial year

The table below can be used to determine the period to use for calculating withholding for income streams that start during the financial year:

Age of payee	If reversionary death benefit income stream	When income stream started	Calculate portion of income stream for the following period
Over 60 years for full financial year	Any age for deceased	Any time during the year	Start of income stream to end of financial year
Turns 60 years during financial year	Not a reversionary death benefit income stream (ie. payee's own income stream)	Before payee turns 60	Day payee turns 60 to end of year
		After payee turns 60	Start of income stream to end of financial year
	Deceased was less than 60 years	Before payee turns 60	Day payee turns 60 to end of year
		After payee turns 60	Start of income stream to end of financial year
	Deceased was 60 years or more	Before Payee turns 60	Start of income stream to end of financial year
		After payee turns 60	Start of income stream to end of financial year
Under 60 years for full financial year	Deceased was 60 years or more	At any time during the year	Start of income stream to end of financial year

Payment summaries

You must issue a PAYG payment summary – superannuation income stream to the payee for the total of the payments made in the financial year. This must be provided by 14 July. This date may be earlier if the payee requests it.

For 'account-based' income streams, you are only required to provide a payment summary to the payee where there is a requirement to withhold. You do not need to provide a payment summary for the period after the payee turns 60.

For 'capped defined benefit' income streams, where a payee turns 60 during the year you must issue 2 separate payment summaries – one for the period prior to the payee turning 60 and one for the period from the payee's 60th birthday.

A payment summary is required to be issued to a payee in receipt of a super income stream even if no tax was withheld.

Payment summaries can also be printed using software that conforms to our reporting specifications.

For more information, see payment summary information and reporting specifications on our Software developersExternal Link website.

PAYG withholding publications

You can access all PAYG withholding tax tables and other PAYG withholding publications at:

• Tax tables
• PAYG withholding.