Changes to Minimum Pension Payments

Sep 1, 2020 | Private Wealth

Certain superannuation pensions and annuities are subject to rules that determine minimum and maximum amounts to be paid in a financial year. Once you start a pension or annuity on or after 1 July 2007, a minimum amount is required to be paid each year. There is no maximum amount other than the balance of your super account, unless it is a transition to retirement pension which is not in the retirement phase, in which case the maximum amount is 10% of the account balance.

COVID-19 (novel coronavirus) – temporarily reducing superannuation minimum payment amounts

For many retirees, the significant losses in financial markets as a result of the COVID-19 crisis are having a negative effect on the account balance of their superannuation pension or annuity.

To assist retirees, the Government has reduced the minimum annual payment required for account-based pensions and annuities, allocated pensions and annuities and market-linked pensions and annuities by 50% in the 2019–20 and the 2020–21 financial years.

Superannuation and annuity providers calculate the minimum annual payment required at 1 July each year, based on the account balance of the member or annuitant. The 50% reduction will apply to the calculated minimum annual payment.

Age 

Temporary percentage factor

(2019/20 and 2020/21)

Normal percentage factor
(2013/14 to 2018/19)

Under 65

2%

4%

65 to 74

2.5%

5%

75 to 79

3%

6%

80 to 84

3.5%

7%

85 to 89

4.5%

9%

90 to 94

5.5%

11%

95 or more

7%

14%

 Please note: These withdrawal factors are indicative only. Please contact us on |PHONE| for more information.

If you have any concerns regarding your minimum pension payments please contact us on |PHONE|

Source: ATO

<a href="https://ugc.net.au/author/louis/" target="_self">Louis van Coppenhagen</a>

Louis van Coppenhagen

Louis is a Financial Adviser with 15 years experience, three university degrees and specialist qualification in Aged Care.

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