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Superannuation Access & Pension Withdrawals

Written by Sarah Pogson . April 05, 2020
8 min read

To support individuals across Australia with the impact of COVID-19, the Federal Government has introduced temporary measures including eligible individuals to gain early access to their superannuation and reducing the minimum pension withdrawal for self-funded retirees.

Below we will outline the measure, provide relevant resources and help you understand your eligibility.

See above for the most recent resources available from Treasury. This resource provides an overview of the measure, including examples to help gain an understanding on how the measure can be applied to your business.

Contents

Early Access to Superannuation

    1. What Will I Receive?
      From 20 April 2020, eligible individuals who are impacted financially due to COVID-19, will be able to access $10,000 from their Superannuation Funds for both the 2020 and 2021 Financial Years These withdrawals will be tax free and not subject to the standard tax implications of superannuation withdrawals.

    2. Am I Eligible?
      To be eligible, individuals need to satisfy any one or more of the following:

      1. You are unemployed; or

      2. You are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or

      3. On or after 1 January 2020:

        1. you were made redundant; or

        2. your working hours were reduced by 20 per cent or more; or

        3. if you are a sole trader — your business was suspended or there was a reduction in your turnover of 20 per cent or more.

    3. How Do I Apply?
      Applications can be made via your MyGov account. You will need to certify that you meet the above eligibility criteria.

      After the ATO has processed your application, they will issue you with a determination. The ATO will also provide a copy of this determination to your superannuation fund, which will advise them to release your superannuation payment. Your fund will then make the payment to you, without you needing to apply to them directly.

      Separate arrangements will apply if you are a member of a self-managed superannuation fund (SMSF).

Reduction in Minimum Pension Withdrawals

Self-funded retirees are required to withdrawal a minimum percentage of their pension balance each financial year as a part of their pension compliance. These minimum pension withdrawal percentages have been reduced for the 2020 & 2021 Financial Years, as shown below:

Age Previous Withdrawal % (per ATO) Current Withdrawal % (per ATO)
Under 65 4% 2%
65–74 5% 2.50%
75–79 6% 3%
80–84 7% 3.50%
85–89 9% 4.50%
90–94 11% 5.50%
95 or more 14% 7%


Any excess withdrawals over the reduced minimum withdrawal percentage, if already withdrawn, cannot be returned to the fund unless an eligible contribution is being made (e.g. concessional and/or non-concessional contributions).

If you would like to discuss any of these measures and what they mean for you and your business, our team is available to assist you. Please don't hesitate to talk with us on (02) 4229 2211 or you can send your enquiry online.

*The above information was correct at the time of printing and subject to change*
Written by Sarah Pogson . April 05, 2020
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