Reduced minimum pension payments for FY20 and FY21

The government has announced it is reducing the minimum pension payment requirement for account based pensions by 50% in both FY20 and FY21. All account based pension holders are eligible for this.

The minimum pension that you are required to draw is based upon the the balance at the start of year financial year (1 July 2019 for FY20) and your age.

[table width =”50%” style =”” responsive =”false”]
[table_head]
[th_column]Age[/th_column]
[th_column]Standard Minimum %[/th_column]
[th_column]Reduced % for FY20 & FY21[/th_column]
[/table_head]
[table_body]
[table_row]
[row_column]Under 65[/row_column]
[row_column]4%[/row_column]
[row_column]2%[/row_column]
[/table_row]
[table_row]
[row_column]65-74[/row_column]
[row_column]5%[/row_column]
[row_column]2.5%[/row_column]
[/table_row]
[table_row]
[row_column]75-79[/row_column]
[row_column]6%[/row_column]
[row_column]3%[/row_column]
[/table_row]
[table_row]
[row_column]80-84[/row_column]
[row_column]7%[/row_column]
[row_column]3.5%[/row_column]
[/table_row]
[table_row]
[row_column]85-89[/row_column]
[row_column]9%[/row_column]
[row_column]4.5%[/row_column]
[/table_row]
[table_row]
[row_column]90-94[/row_column]
[row_column]11%[/row_column]
[row_column]5.5%[/row_column]
[/table_row]
[/table_body]
[/table]

For anyone who has been drawing the minimum on a regular basis since 1 July 2019, they would have already met the new reduced minimum and therefore could choose to receive no further payments until after 30 June 2020.

For anyone who has not drawn anything yet, they can choose to receive the new reduced minimum instead of the original pension amount that would have applied.

If you would like to discuss how this change might impact you, please call me on 0411 575 664.

This article is the opinion of the writer and does not consider the circumstances of any individual. This document has been prepared by Peter Keogh (Authorised Representative No. 253538 of Paragem Pty Ltd AFSL 297276) and is intended to be a general overview of the subject matter. The document is not intended to be comprehensive and should not be relied upon as such. We have not taken into account the individual objectives or circumstances of any person. Legal, financial and other professional advice should be sought prior to applying the information contained in this document. No responsibility is accepted by Peter Keogh, Paragem or its officers.