Changes to minimum drawdowns from 1 July 2021

Changes to minimum drawdown limits

From 25 March 2020, the Government temporarily reduced the minimum drawdown amounts for account based pensions for the 2019-20 and 2020-21 financial years in response to COVID-19's impact on investment markets. This temporary measure ends on 30 June 2021.

From 1 July 2021, the Government's default minimum drawdown amounts for the 2021-22 financial year apply to all account based pensions, with no reductions.

If you're an existing Choice Income or TTR Income member, your payment amount may increase automatically or stay the same* from 1 July 2021, depending on

  • what payment option you chose up to 30 June 2021, and
  • what your default minimum drawdown amount is for the 2021-22 financial year. (See table below)

To view different scenarios, see below section 'I’m a Choice Income/ TTR Income member. What does this mean for me?'

You don't have to do anything. You'll get an email or letter in mid-May or June notifying you of these changes. You'll also receive an email or letter in July every financial year to confirm your payment details.

As a Choice Income or TTR Income member, you can change your payment amount and frequency anytime via your online account. (Maximum withdrawal limits apply for TTR Income members).

*Unless you change your payment options or your balance runs out.

Why are the minimum drawdown amounts changing again?

The Government temporarily reduced the minimum drawdown amounts in March 2020 in response to the impact of COVID-19 on investment markets. Reduced minimum amounts provided you with the option to manage your income payments differently during a challenging economic environment.

From 1 July 2021, this temporary reduction ends, and the Government minimum drawdown amounts for the 2021-22 financial year onwards will resume to the default amounts prior to this COVID-19 measure (see table below).

 

For details of this Government measure ending on 30 June 2021, visit the ATO webpage Minimum annual payments for super income stream or download the Treasury fact sheet 'Providing support for retirees' under 'Temporarily reducing superannuation minimum drawdown rates'.

Changes to Government minimum drawdown amounts

Age at 1 July each year TEMPORARY MINIMUM DRAWDOWN AMOUNTS END 30 JUNE 2021 DEFAULT MINIMUM DRAWDOWN AMOUNTS START FROM 1 JULY 2021
Preservation age to 64  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 and over  7% 14%

The Government's temporary minimum drawdown amounts for the financial years 2019-20 and 2020-21 started on 25 March 2020 and will end on 30 June 2021.
The Government's default minimum drawdown amounts apply from 1 July 2021, for the financial year 2021–22 onwards.

What this means for new Choice Income or TTR Income members

If you open a Choice Income or TTR Income account from 25 March 2020 to 30 June 2021, the Government's temporary reduced minimum amounts apply up to 30 June 2021, unless you choose a larger amount.

If you join Choice Income or TTR Income from 1 July 2021 onwards, the Government's default minimum drawdown amounts for the 2021-22 financial year apply, unless you choose a larger amount.

All Choice Income and TTR Income members can change drawdown amounts any time via their online account and withdraw extra money when they wish. Maximum withdrawal limits apply for TTR Income members.

I’m a Choice Income/ TTR Income member. What does this mean for me?

From 1 July 2021, your payment amount may increase automatically or stay the same*, depending on

  • what payment option you chose up to 30 June 2021, and
  • what your default minimum drawdown amount is for the 2021-22 financial year. (See table above)

You don’t have to do anything, unless you choose to change your payment amount and frequency. You can make payment changes anytime by logging into your online account.

You'll also receive an email or letter in July every financial year to confirm your payment details.

Different scenarios are listed below.


I chose 'Minimum' payment amount

If you're receiving the minimum amount up to 30 June 2021, your payment amount will automatically increase from 1 July 2021, to meet your default minimum amount for the 2021-22 financial year.*

For example, if you've chosen 'Minimum' payment amount and you receive 2% of your 1 July 2020 account balance up to 30 June 2021, your minimum payment amount will automatically increase to 4% from 1 July 2021.

I chose my own payment amount

If your chosen amount up to 30 June 2021 is the same or greater than the default minimum amount for the 2021-22 financial year, your payment amount will stay the same from 1 July 2021*; or

If your chosen amount up to 30 June 2021 is less than the default minimum amount for the 2021-22 financial year, your payment amount will automatically increase from 1 July 2021 to meet the default minimum amount.*

I'm a TTR Income member, and I chose the 'Maximum' payment amount

If you've chosen the maximum payment amount, your payment amount will remain 10% of your account balance in the new financial year (2020-21), unless you change your payment amount or your balance runs out.

I'm a Smart Default member aged 80 and over

Smart Default members aged 80 and over on 1 July 2021, will have different drawdown rates* applied from 1 July 2021. You'll receive a letter or an email notifying you in mid-May or June 2021 of these changes. You can also view your letter by logging into your online account.

View Smart Default drawdown amounts

I'm a Smart Default member aged under 80

Smart Default members aged under 80 on 1 July 2021, will have the same drawdown rate of 6% from 1 July 2021*. You'll receive a letter or an email notifying you in mid-May or June 2021. You can also view your letter by logging into your online account.

View Smart Default drawdown amounts for choice income

View Smart Default drawdown amounts for TTR Income

*Unless you change your payment options or your balance runs out.
Maximum withdrawal amounts apply for TTR Income members.

How to check or change your payment amount online

You can change your payment amount any time when you log into your online account.


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