The Government has introduced a temporary change to reduce the minimum drawdown requirements for account-based income streams (and similar products) by 50 per cent for the 2019-20 and 2020-21 financial years super as part of its economic response to the coronavirus.
Similar changes were made following the Global Financial Crisis, reducing the need for retirees to sell down investment assets, enabling them to better manage the impact of the current volatility in financial markets.
For more information, refer to the Government’s Providing support for retirees fact sheet.
The Government is temporarily reducing superannuation minimum drawdown requirements for account-based income streams and similar products by 50 per cent for the 2019-20 and 2020-21 financial years.
This measure will benefit retirees with these accounts by reducing the need to sell investment assets to finance minimum drawdown requirements.
The lower rates will apply to any new request received to reduce income account payments to the minimum from 25 March 2020 (when our processes and systems were updated). To have your payments reduced to the new minimum rates, complete and return a Request to vary your payment – income accounts form that you can find at mercysuper.com.au or by contacting us.
The following table highlights the previous and new minimum payment rates.
|Age||Previous rate||New rate|
|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%|
You can arrange for your payments to be reduced to the new minimum rates by logging into your account using Member Online. Select ‘Your Withdrawal Details’ then:
You can also arrange for your payments to be reduced to the new minimum rates by completing and returning a Request to vary your payment – income accounts form. Select the ‘Minimum amount permitted for the overall year’ option in Step 2 – Provide payment instructions. You can find this form at mercysuper.com.au or by contacting us.
Note: If your current payments for the financial year have already exceeded the new minimum amounts, completing a new form indicating your desire for the updated minimum payments will halt any further payments for the remainder of the financial year. The new minimums will then apply to your regular payments for the 2020-21 financial year.