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Tax and other useful facts

Income stream annual drawdowns factors

Section: 6.7

COVID-19  - temporarily reducing superannuation minimum payment amounts

Retirees who savings are affected by financial market volatility can take advantage of a temporary reduction in minimum superannuation drawdown requirements. Social security deeming rates are also being reduced in recognition of low interest rates on savings.

Reduced drawdowns

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

Age Default minimum drawdown rates (%) for 2013-14 to 2018-19 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.

Mike is a 66 year old retiree with a superannuation account-based pension

The value of Mike's account-based pension at 1 July 2019 was $200,000.Under current minimum drawdown requirements, Mike is required by legislation to drawdown 5per cent of his account balance over the course of the 2019-20and 2020-21income years.

This means Mike has to drawdown $10,000 by 30 June 2020 to comply with the minimum drawdown requirements.

Following the temporary reduction in minimum drawdown requirements, Mike will now only be required to drawdown 2.5 per cent of his account balance, that is, $5,000,by 30 June 2020. If Mike has already withdrawn over $5,000 for 2019-20, he is not able to put the amount above $5,000 back into his superannuation account.

On 1 July 2020 the value of Mike's account-based pension is $180,000 (after drawdowns and investment losses).During 2020-21,Mike is required to drawdown 2.5 per cent of his account balance, which is $4,500,instead of $9,000.As a result of this change to minimum drawdown requirements, Mike is able to preserve his capital while still drawing an income from his superannuation.

Source: Treasury - fact sheet providing support for retirees (

This technical resource is intended for the use of financial advisers only. It is current as at the date of publication but may be subject to change. This publication has been prepared without taking into account a potential investor's objectives, financial situation, needs or objectives. Before making a recommendation based on this material, you should consider its appropriateness based on the client's objectives, financial situation and needs. Rainmaker Group is not a registered tax agent under the Tax Agent Services Act 2009. Your client should refer to a registered tax agent before relying on information published herein that may impact their tax obligations, liabilities or entitlements.

Last modified: Thursday, August 27, 2020