COVID-19 FAQS: Temporary reduction of superannuation minimum drawdown requirements 

 

1. Can you explain the government changes?

In response to COVID-19, the Federal Government temporarily reduced the minimum Pension payment requirements for Account-Based Pensions and similar products by 50% for the 2019-20 and 2020-21 income years, ending on 30 June 2021. This initiative was due to expire 1 July 2021, however, the Government has announced they will extend the minimum drawdown rates for a further year to 30 June 2022.

The measures were designed to reduce the need to sell investment assets to fund minimum drawdown requirements, providing you with flexibility during these uncertain times.

2. What happens from 1 July?

The reduced minimum amounts will be used to calculate your payments in the 2021-22 financial year. If you have told us that you want to receive the minimum each year, the reduced minimum amount will again be applied automatically from 1 July, 2021.

If you have told us you want to receive the maximum amount permitted for Transition to Retirement pensions, or that you are receiving a nominated amount (for example your payments are increased by the CPI rate, where your pension allows), you will continue to receive these payments.

3. I don’t want my Pension payment to be reduced, what do I need to do?

1. Nominate your new Pension payment amount by logging into your online account and editing your current withdrawal details on the ‘Withdrawals’ page. Please note you cannot elect an amount below the minimum payment.
Or
2. Download and complete the Pension Variation form. Return the completed form to: Mercer Super Trust - Allocated Pension Division, GPO Box 4303, Melbourne, VIC 3001

4. When will I see the changes on my account?

Your account has been updating to include the new minimums amounts. If you have requested a change to your payments, once complete you will see these updates and receive a confirmation. 

5. Will I still get my pension payments?

If you have already received more than your updated minimum amount, you have the following options:

  • Stop your regular payments until next financial year; or
  • Receive any remaining payments at the new minimum rate; or
  • Continue to receive your payments as scheduled

6. What are the new minimum drawdown amounts for the 2019-20,2020-21 and 2021-22 financial years?

Age

Previous rate

New rate

Under 65

4%

2%

65 to 74

5%

2.5%

75 to 79

6%

3%

80 to 84

7%

3.5%

85 to 89

9%

4.5%

90 to 94

11%

5.5%

95 and over

14%

7%

 

Latest information on COVID-19 

We’ve created a COVID-19 hub to help you navigate these uncertain times. Here you’ll find the latest information on the changes to super, market updates, FAQs and much more.