Superannuation benefits may be paid in the form of a pension, a lump-sum benefit, or a combination of pension and lump-sum. A “lump-sum” payment essentially is a once and only payment in fulfilment of an entitlement. It may, in some cases, comprise several payments made on a periodic basis, however it is essential that the entitlement is not calculated by reference to periodic criteria (eg. a weekly or monthly amount).
A series of lump-sum superannuation payments is to be treated as lump-sum superannuation benefits and does not constitute a “superannuation pension”.
Superannuation pension commuted to a lump-sum
In some circumstances, a client may be entitled to commute part of his or her superannuation pension into a lump-sum benefit. Following the decision of the Administrative Appeals Tribunal in Re Hammerton and Comcare (1995), the client's superannuation entitlement after the commutation must be regarded as comprising part pension and part lump-sum.
Until 24 December 1992, the SRC Act did not provide for the situation where a client received both pension and lump-sum. In such cases, the lump-sum is to be ignored and s 20 is applied.
Where the client retired after 24 December 1992, new s 21A applies; both the Government-financed portion of the pension and the lump-sum are to be taken into account in the calculation of incapacity payments.