COVID-19 rules for drawdowns
1 June 2021
No doubt you are aware of the COVID-19 pandemic and its impact on investments in Australia.
We are pleased to be able to tell you that the Government has announced some reduced drawdown options for retirees with income streams. This means that you can choose to leave more of your money in your AvSuper income stream account this and next financial year.
What is the reduced drawdown option?
Usually, you must withdraw a minimum percentage of your account each financial year. The exact minimum percentage depends on your age (refer to our website if you are unsure what percentage currently applies to you). For 2019-20 and 2020-21, you could chose to withdraw half as much.
In fact, once you have withdrawn at least half of your minimum drawdown in a year, you don’t have to withdraw any more that financial year. You cannot, however, re-contribute any excess amounts into your income stream.
As of 29 May 2021, this reduction also applies to the 2021-22 financial year.
Of course you can continue to draw down on your pension as usual if you so wish.
How to access the reduced drawdowns
First, assess your drawdown needs and decide what percentage of your account you wish to drawdown for the remainder of this financial year and for the coming financial year.
We will soon be contacting our Income Stream members about their 2021-22 drawdown amounts. Depending on whether you want to accept the minimum amount or not, please follow the instructions below.
Note that the deadline showing in AvSuper Online relates to the changes taking effect before your next payment.
Adjusting 2021-22 drawdowns
If you have currently selected to receive the (existing or revised) minimum payment amount, this will automatically reduce your 2021-22 payment to the lower rate. You do not have to do anything to receive the reduced amounts from 1 July 2021.
If you have selected an amount above your minimum for 2020-21, we will use that same amount for 2021-22 (or round it up to the revised minimum if required).
You can adjust the payment amount by logging into AvSuper Online (AOL) from mid June and following the steps below. Your annual minimum details letter will also provide a paper-based option for adjusting your drawdown amount for 2021-22, if you want more than the revised minimum.
Tell us how much you want to drawdown by following these steps:
- log into AOL
- select the ‘Income Stream details’ heading under ‘My account’
- select the ‘Edit details’ button at the bottom of the page
- select ‘Nominated Fixed Dollar Annual Amount’ as the nomination type
- enter your new annual drawdown amount you calculated above in the ‘Gross annual ($)’ box
- change the payment frequency if required
- click the save button
- log out of AOL