COVID-19: Superannuation Announcements

by Jason Roccasalvo, Partner, TAG Financial Services

The Federal Treasurer announced yesterday (22 March) the following measures that have a direct impact on superannuation:

Pension Reductions

The immediate reduction of pension minimums for the 2019/20 and 2020/21 financial years.

Some may recall a similar measure during the GFC between 2009 – 2013.

The announced reduction is a 50% reduction, reducing minimum percentages to:

Age NEW reduced minimum Previous minimum
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%

Early Release of Super

Individuals in financial stress as a result of the Coronavirus (COVID-19) will be able to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21.

Eligible individuals will be able to apply online through MyGov for access of up to $10,000 of their superannuation before 1 July 2020.

They will also be able to access up to a further $10,000 from 1 July 2020 for another three months.

They will not need to pay tax on amounts released and the money they withdraw will not affect other Government payments such as Centrelink or Veterans’ Affairs payments.

If you have any questions, please contact us on 03 9886 0800 or via email.

Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686).