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COVID-19 and reducing minimum drawdown

Last updated: 2 April 2020

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Key points

  • As part of the government’s economic response to COVID-19, they have passed legislation to allow the temporary reduction of drawdown requirements for account-based pensions. 
  • This information is relevant for members who have a Retirement income account and Transition to retirement income account.
  • The annual drawdown requirements will reduce the required minimum payment by 50% for 2019-20 and 2020-21.
  • As every member's situation is unique, it is unlikely that the change in the minimum drawdown requirement will automatically change your existing regular payments.
  • Log in to Member Online to review and change your regular payments.

Temporary reduction to minimum annual payment amount

As a result of the novel coronavirus (COVID-19) crisis, the Government has reduced the minimum annual payment amounts for superannuation pensions (like Sunsuper’s Transition to retirement and Retirement income accounts). This is intended to help retirees, and those close to retirement, to manage the impact of volatile financial markets on their retirement savings.  

For the remainder of the 2019-2020 financial year, existing members can opt to reduce their payments, or stop their payments if they have already received the reduced minimum amount for the financial year.  

Members who set up an Income account (including those members who re-start their pension) from Thursday 2 April 2020 and elect to receive the minimum payment will have the reduction automatically applied.

From 1 July 2020, the reduction will be automatically applied for all members who have elected to receive the minimum payment for the 2020-21 financial year.

 


How to work out your reduced minimum annual payment

The information provided in the table below replaces the minimum percentage factors table on page 7 of the Sunsuper for life guide issued 29 March 2020. Use the percentage factors in the table below to calculate your minimum annual payment amount, using your age at 1 July of the financial year (or at the date your income account commenced, if later).

Your age Standard percentage factors Reduced percentage factors applicable for 2019-20 and 2020-21
Less than 65 4% 2%
 65-74 5% 2.5%
 75-79 6% 3%
 80-84 7% 3.5%
 85-89 9% 4.5%
 90-94 11% 5.5%
 95 or older 14% 7%

 

To check your current income payment amount and make changes:
  1. Log in to Member Online
  2. Navigate to “Retirement” then choose “Income payments” from the menu.
  3. On the “Income payments” page there will be payment details including amount, frequency, and next payment date.
  4. Use the Change payment details button to make any changes to your income payments.
To check the amount you have received in income payments for the current financial year:
  1. Log in to Member Online
  2. Navigate to “Your account” then choose “Transaction history”
  3. On the “Transaction history - summary” page, select “Current financial year” from the date range menu on the page.
  4. The summary on the page will include a line for “Pension payments”, this is the total so far this financial year.
If you would like further information and guidance, please see the government’s retirees factsheet.

 


How do I reduce my payment amount?

The standard minimum drawdown levels for Income account members have been reduced by 50 per cent for both the 2019-20 and 2020-21 financial years.

Your 2019-20 financial year payments:

  • If you’re receiving the standard minimum level, your remaining payments this financial year continue unchanged.
  • To lower your remaining payments, you can now specify another amount down to the reduced minimum level in Member Online.
  • If you've already received the reduced minimum amount for 2019-20, you can stop your remaining scheduled payments in Member Online by selecting the minimum. An additional payment is paid if you haven't received at least the reduced minimum by 30 June 2020.
  • If you restart or open a new Income account, the default is the reduced minimum level.

Your 2020-21 financial year payments:

  • Importantly, if you’ve remained at the standard minimum level, your payments for 2020-21 will default to the reduced minimum level. If you don’t want the reduced minimum, you must specify another amount in Member Online after 1 July.
  • If you’ve already lowered your payments to the reduced minimum level for 2019-20, you’ll continue to be paid at the reduced minimum level.
  • If you’ve specified another amount, you’ll continue to receive this amount.

 


More information

COVID-19 market update

Read the latest from our Chief Economist to find out what Sunsuper is doing, what it could all mean for your super investment, and what (if anything) you should consider doing.

Early access to your super

If you are a Super-savings account holder and are in financial stress as a result of COVID-19, you may be eligible to access up to $10,000 of your superannuation in 2019-20 and a further $10,000 in 2020-21.