From 1 July 2023, superannuation members with account-based pensions are required again to take at least the standard minimum pension amount each year from their account. This is called the minimum pension payment and for existing income streams, it is a percentage of your account balance on 1 July.

The Government halved this minimum payment requirement from 2019/2020 in response to the COVID-19 pandemic. This was done to allow pension members to withdraw less of their retirement savings, to assist pension account balances to recover from capital losses during volatile markets. This was a temporary reduction that applied over the last few years and extended to 30 June 2023.

However, for 2023/24, the minimum drawdown amounts returned to normal levels as shown in the following table.

Members can take more than the minimums stated above but run the risk of depleting their capital faster.

Income stream providers may contact you if you hold existing account based pensions to confirm the level of pension payments for the new financial year.

SMSF trustees should also closely review the requirements to ensure that the minimum pension amount will be paid in the financial year. Failure to make the required minimum payments could result in significant penalties.

It’s important to seek advice for assistance in managing your cashflow.