COVID-19 and Your Superannuation

Reducing Superannuation Minimum Drawdown Rates

Certain superannuation pensions and annuities are subject to rules that determine minimum and maximum amounts to be paid in a financial year.

For many retirees, the significant losses in financial markets as a result of the COVID-19 crisis are having a negative effect on the account balance of their superannuation pension or annuity,  To assist, the Government has reduced the minimum annual payment required for account-based pensions and annuities, allocated pensions and annuities, and market-linked pensions and annuities by 50% for the 2019-20 and 2020-21 financial years.

Early Release of Superannuation

From mid-April, eligible individuals will be able to apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020.  They will also be able to access up to a further $10,000 from 1 July 2020 until 24 September 2020.

Individuals will not need to pay tax on amounts released, and the money they withdraw will not affect Centrelink of Veteran’s Affairs payments.

An individual is eligible to access their superannuation if they meet any of the following criteria:

  • They are unemployed.
  • They are eligible to receive a JobSeeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit, or farm household allowance.
  • On or after 1 January 2020 they were either:
  • made redundant;
  • had their working hours reduced by 20% or more; or
  • their business was suspended or there was a reduction in turnover of 20% or more if a sole trader.

The decision to access superannuation early is a serious one, and should be carefully contemplated.  For advice specific to your circumstances, please contact us.