SMSF practitioners helping a client deal with a release authority should be aware there are no legal barriers to prevent it being paid from a pension account and in doing so they will not partially commute the pension, Heffron SMSF technical and education services director Leigh Mansell has stated.
Speaking at the Heffron Super Intensive Day 2026 earlier this week in Sydney, Mansell noted this was an issue as some SMSF software systems prevented release authority payments unless they were solely made from an accumulation account.
She noted release authority payments, in regards to excess concessional and non-concessional contributions, Division 293 tax and the First Home Super Saver Scheme, are considered to be non-assessable, non-exempt benefit payments that must be paid to the member, and can be made from any super interest, not just an SMSF.
“Can we elect for it to come out of a pension account? If it can, then can it be classified as a pension payment?” she asked during her presentation.
“We hear some people say that for a release authority they have to use SuperStream to process it and the software they are using states the only way that it can process a release authority is via a lump sum payment from an accumulation account.
“I have spoken to this software provider and they have said it’s a known shortcoming in their software which will change as part of their Division 296 programming.
“Another big software provider states you can take it from a pension account, but it can’t be a pension payment.
“The way they have their software programmed is the payment will come out as a lump sum and thus you are partially commuting the pension, so it is not a pension payment.”
She noted these systems have led people into believing it was not possible to pay a release authority from a pension account and have it count towards a pension minimum, but pointed out the Superannuation Industry (Supervision) (SIS) Act said nothing about the source or nature of a payment.
“The law does not require a release authority to come out from an accumulation account, nor does it require it to come out as a lump sum payment from anywhere, so it could be paid from a pension account,” she said.
“The SIS Act basically says every payment that comes out of a pension account is a pension payment by default, unless the member partially or fully commutes the pension.
“We can have release authority payments paid from pension accounts and the default position is they are going to count towards the minimum, and if we’re dealing with a pre-retirement transition-to-retirement income stream, it is going to count towards the maximum.”
Jason Spits
SENIOR JOURNALIST
Jason is a senior journalist with Benchmark Media and writes for the selfmanagedsuper website and magazine and smstrusteenews website. He has covered financial services since 1999 and has written about life insurance, superannuation, investment management and financial advice, in both a freelance and in-house capacity, and also did a brief stint as a media manager for an industry association. He has been the editor of trade titles Money Management and Financial Standard, and was most recently senior journalist with life insurance title Riskinfo.
Articles by Jason