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Drawdown rates for 2021

Minimum payments from your super pension

What are drawdown rates?

Each year, the Australian Government requires superannuation account holders receiving an income stream to withdraw at least the minimum pension payment from their super, as part of their annual income stream. This is known as the minimum pension drawdown.

How much is the minimum pension in Australia?

The minimum amount you must drawdown from your account-based or self-managed (SMSF) super depends on how old you are. It is determined by a set percentage rate, and increases as you get older.

Will I be penalised if I don’t withdraw the minimum pension amount?

The minimum pension payments are important because, if your annual withdrawal is less than the minimum, your super pension could lose its tax-free status.

Can I withdraw more than the drawdown rate?

If you have enough super then yes, but remember, by only taking the minimum or thereabouts your super pension will last longer.

Does the minimum drawdown affect my age pension?

Centrelink applies two tests to determine your age pension: the income test and the assets test.

The income test is not affected by the amount you drawdown, because Centrelink uses a pre-determined estimate known as deeming to calculate your expected super pension income.

The assets test looks at your total super balance (along with your other possessions and investments) so if you draw down more from your super then the super balance falls and it affects the assets test result.

What is the minimum super drawdown?

Age Minimum pension payment 2021-22 Minimum pension payment 2019-20, 2020-21 Minimum payments for all years 2013-14 to 2018-19
Under 65 4%   2% 4% 
65-74 5%  2.5%  5% 
75-79 6%  3.0%  6% 
80-84 7%  3.5%  7% 
85-89 9%  4.5%  9% 
90-94 11%  5.5%  11% 
95 or more 14%  7%  14% 

To calculate your minimum payment, multiply the percentage in this table by your account balance at 1 July each year.

If you start your super pension after 1 July, the minimum is calculated on a pro-rata basis for that financial year. So for example, if you start your super pension on 1 January (i.e. halfway through the financial year) and your minimum is 4% then your minimum will be half that (2%) as you’re only using your super for half a financial year.

Do drawdown rates apply to self-managed super funds (SMSFs)?

Yes they do. One of the many things you have to remember in running an SMSF is to make a minimum pension drawdown. So if you have an SMSF, you must arrange for the minimum pension payment to be made each year, or lose the tax-free status of your pension.

Automatic minimum payments offer greater peace-of-mind.

If your super pension is with an Industry SuperFund, then keeping on top of the minimum payments is all taken care of, as they arrange it automatically, while giving you a lot more online control of your super in other areas as well.

Make sure your super pension is not penalised. Ask about a retirement income stream from your Industry SuperFund.

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