The Australian Government has extended measures brought in to help retirees through the COVID-19 crisis.
Lower minimum income rate…
If you hold an account-based pension or similar product, you need to withdraw a certain amount each financial year – this is called your minimum income amount. The Government reduced this amount by 50% during the last year.
The lower rate has now been extended until 30 June 2022 so Australian retirees can continue to receive a lower income if they wish. It minimises the need to sell down assets in markets that remain depressed.
Here are the minimum pension drawdown rates for 2021-22.
|Age||Default minimum income (%)||Reduced minimum income for 2021-22 (%)
|95 or more||14||7|
The lower rates are not compulsory, so you can choose to receive a higher payment if you prefer. But if you’ve chosen to receive the minimum income amount, this will continue to apply.
It’s a good idea to check your current pension payment arrangement before making any changes. If you’re an AMP client, you can do this by logging into My AMP
If you’d like to change your pension payment amount, frequency or date, you can:
..and deeming rates
Meanwhile, the Government has retained lower deeming rates for 2021-22, while increasing the asset thresholds at which they apply1. These lower deeming rates were brought in during 2020 to help Australian retirees through the COVID-19 crisis.
|Status||Thresholds 2020-21||Thresholds 2021-22
|Single||First $51,800||First $53,600
|Balance over $51,800||Balance over $53,600
|In a couple, at least one pension
||First $86,200||First $89,000
|Balance over $86,200||Balance over $89,000
|In a couple, no pension
||First $43,100||First $44,500
|Balance over $43,100||Balance over $44,500
Deeming rates apply as a way to check if you’re eligible for the age pension and other entitlements. Deeming assumes you earn a certain income from your investments, regardless of how much you actually earn. It means any Government payments you receive remain steady, rather than fluctuating depending on how your investments are performing.
Deeming can provide an incentive to invest, as any extra amount you earn above the deeming rate doesn’t count as income.
If you’re looking to make the most of your retirement income, here are plenty more tips about how to retire right.
Complimentary retirement health check
The worry list for shares – how worrying are they?21 October 2021 | Grow my wealth AMP Chief Economist Shane Oliver explains why Australian investors should be cautiously optimistic. Read more
What happens to my super when I move overseas?13 October 2021 | Manage my money If you’re a permanent Aussie resident, your super will remain subject to the same rules. If you’re a temporary resident, you can apply to have your super paid to you after you leave. Read more
Renting vs buying06 October 2021 | Grow my wealth If you’re weighing up the pros and cons of renting a place to live versus buying a home, this explainer could help. Read more
Any advice on this webpage is provided by AWM Services Pty Ltd ABN 15 139 353 496, AFSL No. 366121 (AWM Services) and is general in nature only. It doesn’t consider your personal goals, financial situation or needs. It’s important you consider the appropriateness of any advice and read the relevant product disclosure statement, before deciding what’s right for you.
The retirement health check is provided by ipac Securities Limited ABN 30 008 587 595, AFS Licence No. 234656 (IPAC) to eligible members in the Super Directions Fund and is a general advice conversation only. IPAC is a wholly owned subsidiary of AMP. Products in the Super Directions Fund are issued by N.M. Superannuation Proprietary Limited (N.M. Super) ABN 31 008 428 322 (trustee), which is part of the AMP group.
You can read our Financial Services Guide online for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services it provides. You can also ask us for a hard copy.
AWM Services is part of the AMP group and can be contacted on 131 267 or email@example.com.