Scenario married Male aged 66 starting their SMSF pension with a $3m pot.
Min draw of 5% = $150,000.
From life tables with a non reversionary pension a life factor of 17.76. So, 3m / 17.76 = $168,919 is not counted as income. Plus the standard $6968 (couple), give a total of $175,887 that is not counted for the income test.
As the income is less that what is allowed, the income test is met for a full age pension.
Of course the asset test will prevent any pension being claimed.
However under the Pension Loans Scheme, as long as one of the tests would qualify for an Age Pension then the Loan Scheme is available up to a full age pension.
Does this mean that in this scenario one could borrow the additional $32k potentially until death at 5.25%. And repeat every year for 10/15 years?
I'm not suggesting this is a good idea (so please no flames), but interested from a technical aspect.
It does not appear to be in the spirit of what was intended, but I find nothing in the regulation to prevent it.
