Retirees facing the prospect of changing the minimum drawdown amount from their superannuation pension have been offered a reprieve, with the government extending the temporary reduction until 30 June 2022.
The minimum drawdown amounts were halved due to the pandemic last year, a measure that was designed to protect superannuation balances from the devastating financial impact of the pandemic.
The move, which allowed pension members to withdraw less of their retirement savings and keep a greater sum invested if they wished has been extended for another year to give retirees added flexibility.
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Superannuation minister Jane Hume said that the extension would allow some retirees to continue to counter the negative consequences of the pandemic on financial markets.
“(The) announcement extends that reduction to the 2021-22 income year and continues to make life easier for our retirees by giving them more flexibility and choice in their retirement,” Ms Hume said.
“For many retirees, the significant losses in financial markets as a result of the COVID-19 crisis are still having a negative effect on the account balance of their superannuation pension.”
Your super fund will send you a letter after 1 July, as usual, that will outline your minimum amount and your current payment option.
It will also give you the opportunity to nominate a new payment amount if you choose.
If your nominated drawdown amount is higher than the minimum, it will stay the same, unless you decide to change it.
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In other superannuation news, Ms Hume released draft legislation that will make superannuation assets more visible in family law proceedings, a move that has been welcomed by many.
The legislation provides for parties to family law proceedings to apply to the courts to request their former partner’s superannuation information from the Australian Taxation Office (ATO).
It is hoped that the legislation, if passed, will make it harder for parties to hide or under-disclose their superannuation assets in family law proceedings.
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The Australian Institute of Superannuation Trustees (AIST) said the legislation was critical in preventing family violence perpetrators from hiding their super from their partners.
The changes were first recommended by the Women’s Legal Service Victoria in 2018, with the organisation’s manager of policy, Tania Clarke, welcoming the legislation final going before parliament.
“For many of our clients, this reform will be the difference between walking away from a relationship with nothing and getting a fair split of super assets that will help them recover financially from years of abuse,” Ms Clarke said.
AIST chief executive Eva Scheerlinck said that now the legislation was at this stage it was important that it was passed quickly.
“Superannuation is often the biggest – or only – asset in a relationship,” Ms Scheerlinck said. “Importantly, this new measure will speed up what can be a very difficult process.
“Providing a single, reliable source of truth about which super funds their former spouse is a member of will make it much harder for parties to hide or under-disclose their superannuation assets.”
How much do you draw down from your pension? Do you have a nominated amount or do you just take the minimum drawdown amount?
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