Extension to pension minimum drawdown reduction

Pension minimum drawdown reduction extended

In its 2020 economic response to the COVID-19, the Australian Government announced a temporary reduction to superannuation minimum drawdown requirements for account-based pensions and similar products for 2019-20 and 2020-21.  This temporary reduction has been extended for a further year to 30 June 2022.

What does this mean?

The minimum annual payment for account-based and similar pensions is calculated as a percentage of the account balance as at 1 July each year. Last year the Australian Government announced that the minimum annual payment rate will be reduced by 50% for 2019-20 and 2020-21 – and this has now been extended to 30 June 2022.  This measure is intended to benefit retirees by providing them with more flexibility as to how they manage their superannuation assets.  If you have sufficient cash resources this would mean that fewer assets would need to be sold in your superannuation account now during this time of stock market volatility.

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