Minimum pension payments for 2016/2017 year

Note: This article explains the superannuation minimum pension payment factors for the 2016/2017 year. The article also lists the minimum pension factors for the 2015/2016, 2014/2015, 2013/2014, 2012/2013, 2011/2012 and 2010/2011 years. Alternatively, if you are looking for the latest Age Pension rates, click here.

When you start a superannuation account-based pension, you must withdraw a minimum amount each financial year to secure a tax exemption for the investment earnings on the fund assets financing your super pension. A financial year is not a calendar year, and runs from 1 July of one year through to 30 June of the following year: for example, 1 July 2016 to 30 June 2017, for the 2016/2017 year.

The minimum pension payment amount, payable for the financial year, is based on your age and the size of your account balance. The annual minimum payment is calculated on 1 July each year using the percentage linked to your age and your pension’s account balance (see percentage factor table later in the article). If you’re aged 65 to 74, the minimum pension payment for an account-based pension is 5% of your pension’s account balance as at 1 July. For example, Robert is 68 and has $500,000 in his pension account. His annual minimum pension payment is $25,000 under the pension payment rules applicable for the 2016/2017 financial year.

The formula is:

Minimum payment = account balance x percentage factor.

The minimum pension payment factors for the 2016/2017 year and future years are set out in Table 1 below.

Note: Due to horrendous investment market performance during the Global Financial Crisis, and post-GFC years, the federal government reduced the minimum pension amount required to be withdrawn from pension accounts for the 2008/2009, 2009/2010, 2010/2011, 2011/2012 and 2012/2013 financial years (see Table 2 below for temporary pension payment factors for those years). From the 2013/2014 financial year onwards, the minimum pension payment factors returned to normal (see Table 1 below for regular pension factors, or Table 2).

Background: The reduction in minimum annual pension payments in earlier years was designed to help mitigate drawing down on already savaged retirement saving balances, and to minimise forced asset sales to comply with the pension payment rules. (Unfortunately for some retirees with smaller account balances, they had no choice but to withdraw at least the minimum pension amounts in order to meet living expenses, which means the pension payment relief in previous financial years was of no benefit to this category of retiree.)

The minimum pension payment factors apply to account-based pensions and annuities (payable since 1 July 2007); and allocated pensions and annuities.

Note: If you have a market-linked income stream, the calculation for the annual minimum pension payments is different. For the calculation method for market-linked income streams, refer to SIS Regulations, Schedule 6, or chat to your accountant or adviser. Click here to access SIS Regulations Schedule 6.

Minimum annual pension payments (account-based pensions) – 2016/2017 year, and future years

Age of pension account-holderPercentage factors
Under 654%
65 to 74 5%
75 to 79 6%
80 to 84 7%
85 to 89 9%
90 to 94 11%
Aged 95 or older14%

Note: Amount calculated on 1 July each year, unless first year of account-based pension, and then pro-rated from commencement day. If commencement day of the super pension is on or after 1 June of the financial year, then no minimum payment is required for that financial year. Minimum amount to be rounded to nearest $10.

Source: Schedule 7 of the Superannuation Industry (Supervision) Regulations 1994.

Minimum annual pension payments (account-based pensions) – earlier financial years

Note: For the 2008/2009, 2009/2010 and 2010/2011 financial years, the minimum pension payment amount was half of the usual amount (see table below). For the 2011/2012 and 2012/2013 financial years, the federal government deemed that you only had to withdraw 75% of the legislated minimum pension payments (see Table 2 below). For example, for the 2012/2013 year, an individual aged 58 had to withdraw 3% of his account balance for the year, rather than 4% under the regular minimum pension payment rules.

Regular Percentage FactorsTemporary relief was available
Future years and 2016/2017, 2015/2016. 2014/2015 and 2013/2014 years, and 2007/2008 year2011/2012 and 2012/2013 years
(25% relief)
2010/2011, 2009/2010 and 2008/2009 years
(50% relief)
AgeFull PF75% of PF50% of PF
95 or older14%10.5%7%

Note: Amount calculated on 1 July each year, unless first year of account-based pension, and then pro-rated from commencement day. If commencement day of the super pension is on or after 1 June of the financial year, then no minimum payment is required for that financial year. Minimum amount to be rounded to nearest $10.

Source: Table 2 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.


  1. I have trouble finding an answer to a basic question: I have just retired with a SMSF, I am under 60, but past my preservation age. The minimum pension payment info is understood, but the question remains – do I need to commence a pension at all at this time? I have the resources to fund my own retirement outside Super till I am am 60, when I would like to start a tax free pension from my Super.

    • Hi Shane
      Thanks for your comment. The article below should answer your question, and noting that the super rules don’t require a person to start a super pension when they retire. If they leave super in accumulation phase, earnings on super assets are subject to 15% earnings tax, while assets in pension phase are exempt from earnings tax. This response is providing information only and cannot be considered financial advice.
      What is the retirement age in Australia?
      The SuperGuide team

  2. The purpose and effect of these increasing minimum pension payments is to progressively move money out of your tax-advantaged super fund over your life-time. You are required to take this withdrawal from your fund as cash, so if the minimum pension is greater than the amount the fund earns in income, some assets will need to be sold to satisfy this cash requirement. You are not required to spend this money, you can invest it elsewhere, but now these assets are subject to normal tax outside super.

    The purpose is to ensure that your super is used to support you in retirement and not passed on to your beneficiaries as a tax-advantaged gift.

    The effect is that, as we are all living longer than previous generations, these mandated withdrawals mean we are depleting our super funds faster than is prudent.

    The Liberal / National Coalition promised before the 2013 election that they would review these minimum pensions in the light of our risk of outliving our money. After 2 years there has been not a peep about this.

    Another broken promise?

  3. Jimmy Lee says:

    Hi Trish
    This is the first time I read your articles and it is very informative.
    Why is the temporary relief advantageous to pensioners when they are getting lower pension?
    Is it because they can get more from aged pension or other government assistance?


    • Terry Rodricks says:

      Hi there,
      Thanks for your information on pension relief. Could you please clarify the following.
      Calculation of minimum pension for a person aged 60 and balance $100,000 on 1st July
      100,000×3%=3000/12=$250 per month or annual payment of $3000
      I would appreciate if you could clarify that the required annual minimum should be equally distributed over the year.

  4. alan barnes says:

    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.

  5. Dave Rode says:

    I am a Financial Information Service officer at the Cranbourne office and find your site very helpful. thank you.

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