Minimum yearly payment
A minimum payment applies each financial year, depending on your age and your account balance on 1 July of that year.
In March 2020, the Federal Government temporarily reduced minimum drawdown requirements for account-based pensions (and similar products) by 50 per cent for the 2019-20 and 2020-21 income years, due to the financial impacts of the coronavirus (COVID-19) global health emergency.
The standard minimum rates and temporary reduced rates are shown in the table below.
Minimum yearly payment as a percentage of account balance as at 1 July
|Reduced minimum yearly payment for the 2019-20 & 2020-21 income years|
Each year on 1 July your new minimum and maximum (if applicable) limits will be recalculated using your new account balance and age.
In early July, pension payments will be automatically adjusted to a member’s new minimum amount, if their payment type is listed as 'minimum'.
If a member’s payment type is listed as a ‘nominated’ amount, and this amount falls below their new minimum, the system will automatically bring it up to the minimum amount.
Members that have their payment type as a ‘nominated’ amount may want to change this figure and they can do so online or by calling the Helpline (1800 640 886) or by filling in a form which the Helpline will send them.
You must receive at least one pension payment each year, within your minimum and maximum (if applicable) limits. However, if you commence your pension on or after 1 June in any financial year, then no minimum payment is required to be paid to you in that financial year.
You can change your payment amounts and frequency at any time via your online account or by completing and returning a Request to vary pension payment form.
As Retirement Pension members are allowed to make lump-sum withdrawals, no maximum payment limit applies.
Transition to Retirement Pension
You can receive up to a maximum of 10% of your account balance each year.
You may want to consider the level of assets held in your pension if you are using the account as part of a Transition to retirement strategy.
Some of the issues you should consider include:
- You may be required to receive a pension payment higher than your salary sacrifice amount.
- Your current account balance may not provide a sufficient pension payment amount.