Superannuation Reasonable Benefits Limit (RBL) For the most part, your superannuation lump sum payment will be only be subjected to concessional tax rates as outlined in superannuation taxation. The Australian Tax Office (ATO), however, has defined a reasonable benefits limit (RBL) which apply to high-income earners whereby superannuation lump sum payments exceeding a specified amount will be subjected to the highest marginal rate of tax (47%). The lump sum benefit you can accumulate without incurring the maximum tax rate is indexed annually. At present, the amount is $648,946. The Pension RBL If your superannuation benefits are approaching the RBL, you may be tempted to consider an early retirement. However, other options exist for you to reduce the excess benefits tax which will apply should you exceed the RBL. One common option is to access the pension RBL which is roughly double the lump sum RBL and is indexed annually (i.e. $1,297,886 at present). The pension RBL will apply if you take half or more of your benefits in the form of pensions or annuities which meet the required standards. These standards include requirements that the pension or annuity must be payable for life or life expectancy of the recipient and be paid at least annually. This means that you can still access about half of your lump sum which is concessionally taxed while the other half will provide you with a flexible income stream. RBL and the ATO Each time a benefit is paid to you, the payer must report this payment to the Tax Office who will then add this amount to the indexed 'RBL amount' of benefits received by you and determine if any reasonable benefits limits have been exceeded. Should this be the case, you will receive a notice called a determination by the ATO notifying you of their findings that you have exceeded your reasonable benefits limit. The information from the determination received should then be used when preparing your income tax return for the financial year. #recom2()