The maximum amount that a member can access is $20,000 in the following increments, noting that a separate application is to be made on each occasion:

• Up to $10,000 in the financial year ending 30 June 2020
• Up to $10,000 in the financial year ending 30 June 2021

But according to Daniel Butler and Allison Murphy of DBA Lawyers, trustees should consider a range of other factors before accessing the scheme, including:

• Whether the SMSF deed requires updating to enable a TEAS withdrawal, given this is a new condition of release that many SMSF deeds may not authorise.
• The financial impact that any TEAS withdrawal will have on the member’s overall superannuation retirement nest egg over the long term.
• Ensuring the fund has sufficient cash flow to fund any TEAS withdrawal together with its ongoing operations in view of any financial stress on the fund resulting from the coronavirus.
• Preparing relevant trustee resolutions and updating the fund’s records.

As for members currently being paid an account-based pension or a transition to retirement income (TRIS) in retirement phase, Mr Butler and Ms Murphy said the amount required to fund the TEAS payment should first be commuted to accumulation before being paid to the member as a TEAS amount.

However, if a member is being paid a TRIS that is not in retirement phase, they said the amount should also first be commuted to accumulation before being paid as a TEAS amount, noting that a TRIS amount generally cannot be commuted, but new reg 6.19B of SISR authorises a payment of preserved money (after a TRIS is commuted).

“If the payment is not appropriately managed, a contravention of [SISR] could occur, resulting in potential penalties and the amount forming part of the member’s assessable income rather than being tax-free,” Mr Butler and Ms Murphy said.

“You should ensure the SMSF deed authorises this payment and prepare appropriate trustee resolutions.”