Author: Emma Partenza, Manager, TAG Financial Services
In welcomed news for Pensioners, the Federal Government announced on Saturday an extension to the current temporary measures of minimum drawdown rates.
Currently, minimum pension requirements are reduced by 50% until 30 June 2021. Now, these measures have been extended for next financial year until 30 June 2022.
| Age | Minimum % withdrawal | Reduced rates by 50% for the 2019–20 and 2020–21 income years (%) |
| 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 more | 14% | 7% |
The 50% extended relief on minimum drawdown rates apply to Account Based Pensions, Transition to Retirement Income Streams and Market Linked Income Streams. The relief does not extend to Complying Pensions.
This announcement will provide pensioners with greater flexibility and many can now plan into FY2022 with greater clarity amidst a volatile market; potentially alleviating trustees from having to sell down assets in order to satisfy pension requirements.
This is great news for all pensioners.
Pensioners are reminded to ensure their 2021 minimum pension is withdrawn prior to 30 June 2021.
If you have any questions, please contact us on 03 9886 0800 or via email.
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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). Copyright 2021. Please do not reproduce without the expressed written consent of the author.