Minimum pension limits reduced to help preserve retirement savings
The Government is temporarily reducing the superannuation minimum drawdown requirements by 50%, as part of its Coronavirus Stimulus Package.
Members with retirement income streams will have their minimum drawdown payment limits, otherwise referred to as ‘pension payment limits’ lowered by 50% for the 2019-20 and 2020-21 financial years.
How does the new rule affect me?
For members who joined before 25 March 2020
If you’re an existing member and are receiving the standard minimum pension payment you will continue receiving this amount until the end of this financial year. From 1 July 2020, your minimum pension payment will automatically default to the new reduced minimum payment amount and we’ve included what these are in the table below. Also, you can choose to reduce your payment now. If you have received enough income already to meet the new reduced minimum, you can choose to cease payments for the remainder of this financial year. You’ll then start receiving payments again from 1 July 2020 at the new reduced minimum amount. Just get in touch with us using the details at the end of this blog and we can help you to do this.
From 1 July 2020, if you decide to increase your pension payments above the new reduced minimum, you can do this simply by getting in touch with us. The options for this are at the end of this blog.
Please note that if you have already received more than the reduced minimum, you aren’t able to pay some of that excess back to your income stream account.
If you have elected a set payment amount, we want to reassure you that this amount won’t change, and your payment will continue.
For members who join after 25 March 2020
If you’re a new member, you’ll receive the new reduced pension payment limit, and this will continue into the 2020-21 financial year.
The table below shows the new reduced minimum drawdown rates for 2019-20 and 2020-21.
|
Age at start of retirement income stream (and 1 July each year) |
New Minimum Limit due to Coronavirus changes |
Previous Minimum Limit (percentage) |
|---|---|---|
|
Under 65 |
2% |
4% |
|
65-74 |
2.5% |
5% |
|
75-79 |
3% |
6% |
|
80-84 |
3.5% |
7% |
|
85-89 |
4.5% |
9% |
|
90-94 |
5.5% |
11% |
|
95+ |
7% |
14% |
How to apply to increase your pension amount
You can apply to increase your payment at any time no matter when your pension started and you can do this by visiting the online StatePlus portal or by calling us on 1800 620 305 Monday to Friday between 8:15am to 8:15pm (AEST/AEDT).
Due to increased demand during this time, requests to change your pension amount may take up to 3 working days to process.
For more information
To learn more about these new changes, please call us on 1800 620 305 Monday to Friday between 8:15am to 8:15pm (AEST/AEDT).
