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 individual | 2008–09 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) |
| < 65 | 2 per cent | 3 per cent | 4.0 per cent | 2 per cent |
| 65–74 | 2.5 per cent | 3.75 per cent | 5.0 per cent | 2.5 per cent |
| 75–79 | 3 per cent | 4.5 per cent | 6.0 per cent | 3 per cent |
| 80–84 | 3.5 per cent | 5.25 per cent | 7.0 per cent | 3.5 per cent |
| 85–89 | 4.5 per cent | 6.75 per cent | 9.0 per cent | 4.5 per cent |
| 90–94 | 5.5 per cent | 8.25 per cent | 11.0 per cent | 5.5 per cent |
| >95 | 7 per cent | 10.5 per cent | 14.0 per cent | 7 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
