The Government introduced a temporary 50% reduction in the minimum drawdown requirements for the 2020-2019 and 2020-2021 financial years. This measure is designed to assist retirees by reducing their need to sell investments to meet minimum drawdown requirements when market prices may be under pressure.
What will happen from 1 July 2020 to clients who are on minimum drawdown?
The new reduced minimum rates will automatically apply to all pension clients who have previously elected to be on the minimum drawdown from 1 July 2020.
What do you need to do?
If you currently receive the minimum drawdown and do not want the reduced minimum rate to apply, you will need to contact our office to request this to increase as soon as possible.
If you are happy with the reduced minimum rate to apply, there is no need to do anything.
If you currently receive a specified amount (above the minimum drawdown) there should be no change to your payments with the exception of indexation if this has been elected.
What are the new drawdown rates?
The reduced minimums are now available to everyone with an account-based pension, allocated pension, transition to retirement pension and term-allocated pension (growth pension).
*The reduced minimums are available for the 2019/2020 and 2020/2021 financial years. The minimum may be subject to change from time to time. For more information go to ato.gov.au
If you have any questions please contact our office for more information.