Q: I am looking to reduce my pension payment to the revised pension minimums as announce last month. What happens if I have already taken more than the revised minimum amount this financial year?
A: The government is temporarily reducing minimum super pension drawdown requirements for account based or allocated pensions, annuities and similar products by 50% for the current financial year and the 2020-21 financial year.
This will allow retirement income stream recipients to either defer or reduce their pension drawdowns. Consequently reducing the need for retirees to sell investment assets in the current volatile share market conditions to fund their minimum drawdown requirements. This is similar to the initiative utilised during the GFC.
The revised minimum pension for those under 65 will be 2%, age 65 to 74 will be 2.5%, age 75 to 79 will be 3% and 80 to 84 will be 3.5% and so forth.
You will need to contact your pension provider to reduce the pension payment or delay the pension payment to later in the financial year.
If you have already drawn more than the revised minimum for this financial year, you will be unable to return the pension payments to the fund but you can effectively cease drawing pension income for the remainder of the financial year. You then can commence the new financial year with the revised lower minimum requirements.