To pay benefits to a member, you need to:

• ensure they have met a condition of release, such as if the member has:
  • retired
  • reached 65 years of age (even if they haven’t retired)
• ensure the SMSF has enough funds to make the payment
• factor in any capital gains tax implications if selling an asset to make the payment or transferring the asset to the member.

If you are already paying a pension to the member, you need to ensure the pension payment standards are met. You should do this before the pension is commuted and either paid to the member or rolled over to another fund.

If a member accesses their super before they are legally entitled, significant penalties can apply to the fund and the member. The member may also have to pay tax on the super received.