Explained: Minimum withdrawal amounts for super income streams

If you receive a pension through your superannuation or have used super to purchase an annuity, there are minimum withdrawal amounts each year, enforced by the Australian Taxation Office (ATO).

A minimum amount must be paid each year for any pensions or annuities you commenced on or after 1 July 2007.

There is no maximum amount that must be paid unless it is what’s known as a transition to retirement pension. A maximum amount of 10 per cent of your account balance applies for transition to retirement pensions that are not in retirement phase.

How much your minimum withdrawal amount will be depends on your age, and when you commenced the pension or annuity.

The minimum payment amounts have been halved for pensions and annuities that began in the 2008–09, 2009–10 and 2010–11 years and reduced by 25 per cent for the 2011–12 and 2012–13 years. The reductions in these years apply only to account-based pensions and annuities (allocated pensions and annuities and market-linked pensions and annuities).

The government has also reduced the minimum annual payment required for account-based pensions and annuities, allocated pensions and annuities and market-linked pensions and annuities by 50 per cent for the 2019–20, 2020–21, 2021–22 and 2022-23 financial years.

The minimum withdrawal rates are as follows:

Age of individual2008–09 to 2010–11 income years (inclusive)2011–12 to 2012–13 income years (inclusive)2013–14 to 2018–19 income years (inclusive)2019–20 to 2022–23 income years (inclusive)
< 652 per cent3 per cent4.0 per cent2 per cent
65–742.5 per cent3.75 per cent5.0 per cent2.5 per cent
75–793 per cent4.5 per cent6.0 per cent3 per cent
80–843.5 per cent5.25 per cent7.0 per cent3.5 per cent
85–894.5 per cent6.75 per cent9.0 per cent4.5 per cent
90–945.5 per cent8.25 per cent11.0 per cent5.5 per cent
>957 per cent10.5 per cent14.0 per cent7 per cent

You don’t usually need to calculate and withdraw the amount yourself, as superannuation and annuity providers calculate the minimum annual payment required as at 1 July each year, based on the account balance of the member or annuitant.

Do you have a pension or annuity paid for by super? Do you think having a minimum withdrawal amount is fair? Let us know what you think in the comments section below.

Also read: Superannuation work test

Brad Lockyer
Brad Lockyerhttps://www.yourlifechoices.com.au/author/bradlockyer/
Brad has deep knowledge of retirement income, including Age Pension and other government entitlements, as well as health, money and lifestyle issues facing older Australians. Keen interests in current affairs, politics, sport and entertainment. Digital media professional with more than 10 years experience in the industry.
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