Note: The relevant regulations extending the pension payment relief for the 2011/2012 year are in place. For verification, see Schedule 7 of the Superannuation Industry (Supervision) Regulations 1994 or Superannuation Industry (Supervision) Amendment Regulations 2011 (No. 1). The regulations for the
The Government has announced that pension payment relief will be available for the 2012/2013 year as well as for the 2011/2012 financial year. This is great news for retirees suffering through the poor-performing sharemarkets but I had hoped that Australians still recovering from the Global Financial Crisis would receive the 50% drawdown relief on account-based pension minimum payments that they had received for the previous 3 years. I had also hoped the Federal Government would have increased the 25% relief to 50% relief for the 2011/2012 in light of the shocking
Okay, 50% relief is no longer available but the good news is that you can still take advantage of a certain level of drawdown relief, but just not as much relief as in earlier years. The Federal Government has deemed that you only have to withdraw 75% of the legislated minimum pension payments for the 2011/2012 and 2012/2013 years.
What the modified extension of payment relief means for individuals receiving superannuation income streams, is that for the 2011/2012 and 2012/2013 years, the minimum payment amounts for account-based pensions will be 75% of the normal requirements. For example, an individual aged 65 must withdraw 3.75% of his account balance for the 2011/2012 year, rather than 5% under the regular minimum pension payment rules.
Presumably, like previous years, the temporary minimum pension payment relief applies to
I have received many emails from readers asking me about whether the drawdown relief for the 2011/2012 year will increase to 50% so I imagine
The
Minimum annual pension (income stream) payments
| Minimum annual pension (income stream) payments | |||
| Regular Percentage factors | Temporary relief | ||
| 2011/2012 and 2012/13 years | 2010/2011 year | ||
| Age | |||
| 55-64 | 4% | 3% | 2% |
| 65-74 | 5% | 3.75% | 2.5% |
| 75-79 | 6% | 4.5% | 3% |
| 80-84 | 7% | 5.25% | 3.5% |
| 85-89 | 9% | 6.75% | 4.5% |
| 90-94 | 11% | 8.25% | 5.5% |
| 95 or older | 14% | 10.5% | 7% |
Note: Amount calculated on 1 July each year, unless first year of account-based income stream, and then pro-rated from commencement day. Minimum amount to be rounded to nearest $10.
Source: Adapted from Schedule 7, Superannuation Industry (Supervision) Regulations 1994 and Federal Government news releases dated 18 February 2009, and 12 May 2009, and 30 June 2010, and 29 November 2011. Figures for 2011/2012 year and 2012/2013 year calculated by Trish Power.
Background: If you have an account-based pension (or the older-style allocated pension) you must pay a minimum amount at least annually. If you’re aged 65 to 74, the usual minimum pension payment for an account-based pension is 5% of your pension’s account balance. Under the temporary relief, you are required to withdraw a minimum of 3.75% of your account balance as at 1 July 2011 (for the 2011/2012 year). For example, Robert is 68 and has $500,000 in his pension account. His minimum pension payment is $25,000 under the regular pension payment rules, but under the temporary relief his minimum payment is $18,750.
I am a Financial Information Service officer at the Cranbourne office and find your site very helpful. thank you.
Hi Dave
Thanks for letting us know, and for your support.
Regards
Trish
Thank you all for keeping me up to date as a SMSF trustee. Ps. I got 100% first go. Thank You for all of the info, which I read and digest. A happy 66 year young.