The recently finalised ATO TR 2013/5 has provided guidance on the ATO's view on what would cause a pension to cease.

The recent Administrative Review Tribunal decision of QWYN v CMR [2025] ARTA 83 gives some further indication of interpretation of the meaning of "pension", and what could cause something to cease to be a pension.

The Tribunal found the definition of pension in the SIS Act to be "inclusive" and therefore potentially broad, such that it would be harder to consider an act that would cease something to be a pension.

The earlier Federal Court decision of Commissioner of Taxation v Douglas [2020] FCAFC 220 was referenced, however this decision focused on the terms of the pension agreement and superanuation trust deed.

Under the SIS Act and ITAA 97 a superannuation benefit that is not a pension ("income stream") would be a lump sum, and pensions carry certain benefits while lumps sums do as well.

Therefore some parties (such as in QWYN and Douglas) wanted the benefits to be lump sums and not pensions, while in other cases parties want the interest to be a pension (e.g. even if a minimum annual payment is missed and made up for next financial year).

The author believes due to this tension and added complexity of this area that your pension documentation is clear and that no minimum payments are missed and no maximum payments are breached. 

Similarly to the issue of the recipient of a BDBN noted in the Tratter case above, the reversionary pensioner recipient would be restricted under SIS Regs r 1.06(9B) and pointing to r 6.21(2A) (must be paid to a dependant) and r 6.21(2B) must be cashed as a lump sum once the child attains age 25 as referenced in ATO TR 2013/5 para 29.

Swim well within the flags and more updates will follow.

It is also interesting that the Tribunal Member fact checked the applicant's reference to an explanatory memorandum, which was found to have been completely fabricated as a "hallucination" by AI - the reference did not exist.