Australian Government’s Economic Response to COVID-19 – Superannuation & Support for Retirees

Support for Retirees

Due to the impact of volatility in the financial markets, the Government is offering relief for Retirees and Self Managed Super Funds in Pension Mode

The Government is temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50 per cent for the 2019-20 and 2020-21 income years.

The Government is also reducing both the upper and lower social security deeming rates by a further 0.25 percentage points in addition to the 0.5 percentage point reduction to both rates announced on 12 March 2020.

 

Temporary Reduction in Superannuation Minimum Drawdown Requirements

This measure will benefit retirees with account-based pensions and similar products by reducing the need to sell investment assets to fund minimum drawdown requirements.

The reduction applies for the 2019-20 and 2020-21 income years.

 

Age	Default minimum drawdown rates (%)	Reduced rates by 50 per cent for the 2019-20 and 2020-21 income years (%)
Under 65	4	2
65-74	5	2.5
75-79	6	3
80-84	7	3.5
85-89	9	4.5
90-94	11	5.5
95 or more	14	7

 

This measure will have no impact on the underlying cash balance for 2019-20 and a negligible impact in 2020-21.

For more information refer to the Support for Retirees Fact sheet from Treasury.gov.au

 

Early Access to Superannuation

The Government is allowing individuals affected by the Coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21.

There is strict early release requirements that will be assessed by the Australian Taxation Office (ATO).  We stress that this should be considered a last resort for financial assistance.  Accessing your superannuation when the market is so low will be detrimental to your super balance in the future.

For more information refer to the Early Access to Super Fact Sheet from Treasury.gov.au

 

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