Relief for Retirees
Currently, it is a requirement that minimum payments be made
from a superannuation account-based pension at least annually.
Minimum payments are determined by age and the value of the account
balance as at 1 July each year. The minimum annual payment rule is
designed so that retirees draw down on their superannuation capital
over their retirement. This rule recognises that superannuation is
designed as a
retirement savings vehicle with substantial tax concessions.
As a result of the significant downturn in financial markets the
Government has announced a 50 per cent reduction in the minimum
drawdown requirement for account-based pensions for 2008-09.
This action responds to concerns that for many Australians, meeting
the minimum draw down amount in 2008-09 will mean having to sell
investment assets and realise losses in a depressed market. It also
addresses the concern that the minimum draw down requirement was
set based on asset values as at 1 July 2008, when equity values
were higher.
The relief will be delivered via a 50 per cent reduction in the
minimum payment amount for 2008-09.
For those people who have already taken half of the current minimum
payment for
2008-09, the annual nature of the minimum payment rules means that
a further payment will not be required until the end of the 2009-10
year.
The temporary suspension of the minimum payment requirement will
apply to account based annuities and pensions (payable since 1
July, 2007); allocated annuities and pensions (pre-dating the
Better Super changes); account-based and allocated pensions payable
from
Retirement Savings Accounts, and market-linked (term allocated)
annuities and pensions.
Source:Treasurer and Minister for Superannuation -
CANBERRA
18 February, 2009
