04 / Segregation
Choosing the ECPI method
The segregated and proportionate methods apply in different circumstances. Decide which method applies to each period before you apply a percentage to income.
Segregated periods
Income from segregated retirement assets is treated separately from income covered by an actuarial proportion. A period when the fund is wholly in retirement phase can change the method schedule.
Disregarded small fund assets
The DSFA rules can stop assets being treated as segregated. Check the statutory tests with the relevant prior-year member information. Do not substitute the current transfer balance cap. If you do not know the answer, get advice.
When disregarded small fund assets apply, the application is referred to a qualified actuary, who confirms the method before a certificate can be issued.
Trustee choices
From 2021–22, eligible funds with mixed interests for part of a year and wholly retirement-phase interests for another part can choose proportionate treatment for the whole year. Confirm eligibility and keep a record of the trustee’s actual decision.
Electing to segregate particular assets needs an asset and income schedule and specialist review.
Checklist
- Record the facts behind the DSFA answer.
- Keep trustee elections and dated method periods.
- Do not apply two exemptions to the same income.
Further reading: ATO · ECPI method choices