Account-Based Pension Payment Adjustments
In response to financial market negativity over the past month, the Federal Government have announced that for the 2020 and 2021 financial years, the minimum annual pension payment has been reduced to half its normal rate.
If you have already taken your minimum for the current financial year, you are not permitted to re-contribute the amount back into superannuation unless you are ordinarily eligible to make a contribution.
The updated pension payment minimums are as follows:
| Age | Pre change
minimum |
Revised
minimum |
| Under 65 | 4% | 2% |
| 65 – 74 | 5% | 2.5% |
| 75 – 79 | 6% | 3% |
| 80 – 84 | 7% | 3.5% |
| 85 – 89 | 9% | 4.5% |
| 90 – 94 | 11% | 5.5% |
| 95 or older | 14% | 7% |
Given the speed and magnitude of the recent financial market falls, together with the restrictions on movement that will almost certainly reduce expenditure for the foreseeable future, it is worth reassessing your requirements for drawing on your pension account.
If you are taking the minimum pension payment already and have other cash reserves, this is an extraordinary opportunity to reduce the amount you are drawing out of the tax-free pension environment.
Please get in touch to discuss any change you would like to make.