Coronavirus - reduced minimum drawdowns

Reduced minimum drawdown limits

From 25 March 2020, the Government has temporarily reduced the minimum drawdown requirements for account based pensions. The minimum drawdown amounts have been reduced by 50% for the 2019-20 and 2020-21 financial years.

If you’re a Choice Income or TTR Income member and you opted to receive the minimum amount prior to 25 March 2020 and didn’t make any changes to your payment type before 30 June 2020,  the reduced minimum drawdown requirements will automatically apply to your payment amount for the 2020-21 financial year unless you tell us otherwise.

Why is the minimum drawdown amount changing?

The Government has made these changes as part of their response to the impacts of COVID-19 on investment markets. Reduced minimum amounts provide you with the option to manage your income payments differently during the current economic environment.

For details on this Government change, visit the ATO webpage Minimum annual payments for super income streams or download the Treasury fact sheet 'Providing support for retirees' under 'Temporarily reducing superannuation minimum drawdown rates'. For details on how AustralianSuper is responding to COVID-19 and the investment markets, visit australiansuper.com/COVID19.

What are the temporary minimum drawdown amounts?

Age at 1 July each year temporary minimum drawdown amounts*  for 2019-20 and 2020-21 Default minimum drawdown amounts for 2021-22 FINANCIAL YEAR ONWARDS1
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%
* These temporary minimum drawdown amounts for the financial years 2019-20 and 2020-21 are one of the measures introduced by the Government as part of their economic response to COVID-19 (coronavirus).  The reduced minimum drawdown amounts commenced on 25 March 2020.
1 The default minimum drawdown amounts will apply from 1 July 2021, for the financial years 2021–22 onwards.

What does this mean for AustralianSuper members?

This temporary minimum amount applies by default to new Choice Income and TTR Income members who join from 25 March 2020.

For Choice Income and TTR Income members who opted to receive minimum drawdown payments prior to 25 March 2020 and didn’t make any changes to their payment amounts before 30 June 2020, we’ll apply the new temporary reduced minimum amounts to their payments from 1 July 2020.

Choice Income and TTR Income members who were not receiving the minimum payment amount in the financial year 2019-20, and now want to receive the temporary reduced minimum amount in the new financial year, can change their payment amount by logging into their online account and choosing the ‘Minimum’ payment type. 

All Choice Income and TTR Income members can still 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?

If you were receiving the minimum payment amount prior to 25 March 2020,
  • your payment amount would have stayed the same until 30 June 2020, and
  • your payment type was automatically changed to ‘Nominated’ in your online account until 30 June 2020.

 And if you didn’t make any payment changes prior to 30 June 2020,

  • we’ll apply the temporary reduced minimum amounts to your payments from 1 July 2020
  • your payment type will be automatically changed back to ‘Minimum’ in your online account from 1 July 2020
  • your regular payment amount from 1 July 2020 will be calculated based on the temporary reduced minimum amount so you’ll receive smaller payments, and
  • you’ll receive a letter in July every financial year to confirm your payments.

If you would like to change your payment amount, you can do it any time via your online account.

If you didn’t select the minimum payment amount prior to 25 March 2020 and you didn’t select the ‘Nominated’ payment type before 30 June 2020,

  • for most members, your payment amounts will stay the same in the new financial year (2020-21) unless you choose to change your payment amount and frequency, or if your balance has run out.
  • Smart Default members over the age of 80 will have different drawdown rates applied from 1 July 2020. You would have received a letter or an email notifying you dated 12 May 2020. You can also view your letter by logging into your online account.

How to check or change your payment amount online

You can change your payment amount any time when you log into your account. If you wish to change your payments to the temporary reduced minimum amount in the new financial year 2020-21, log into your account and choose ‘Minimum’ payment type.

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