COVID-19 rules for drawdowns

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 can now chose to withdraw half as much.

In fact, if you have already withdrawn at least half of your minimum drawdown this year, you don’t have to withdraw any more in the current financial year. You cannot, however, re-contribute any excess amounts into your income stream.

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.

If you have already emailed us a request to change your drawdown percentage, you do not have to do anything – this will be processed for you and future payments adjusted accordingly.

If you want to change your drawdown amounts but have not yet requested this in writing, you can now do so through Member Online. Depending on whether you want to accept the minimum amount and/or need more payments this year, please follow the instructions below as soon as possible.

Note that the deadline showing in Member Online relates to the changes taking effect before your next payment.

The new minimum

If you would like to reduce your withdrawals to the revised minimum, and probably not get any more payments this financial year, please follow these steps as soon as possible:

  1. log into Member Online
  2. select the ‘Income Stream details’ heading under ‘My account’
  3. select the ‘Edit details’ button at the bottom of the page
  4. select ‘Minimum payment limit’ as the nomination type
  5. click the save button
  6. log out of Member Online

Note that if you have already received at least your nominated amount, you may not receive any more payments this financial year (depending on timing of payments and when you made your request).

If you have already emailed us a request to change your drawdown percentage, you do not have to do anything – this will be processed for you and future payments adjusted accordingly.

 

New minimum with payments this year

If you would like to reduce your withdrawals to take advantage of the revised minimum,but adjust the total so as to get payments this financial year, you need to

1 . Calculate your new annual drawdown amount

You will need to add the total payments you have received this financial year to the total payments you want to receive between now and 30 June 2020.

Total payments received can be found on the ‘Income Stream details’ page within Member Online (tip – just above your bank details at the bottom of the page).

Payments for the remained of the year can be determined by multiplying how much you need each payment by the number of payments left until 30 June. For example, as at 3 April there are 3 monthly and 6 fortnightly payments remaining so your total remaining payments would be 6 x $1,000 = $6,000 if you want $1,000 per month.

You can choose to change payment frequency as well, but remember to factor that into your payment calculations.

2. Tell us how much you want to drawdown by following these steps:

  1. log into Member Online
  2. select the ‘Income Stream details’ heading under ‘My account’
  3. select the ‘Edit details’ button at the bottom of the page
  4. select ‘Nominated Fixed Dollar Annual Amount’ as the nomination type
  5. enter your new annual drawdown amount you calculated above in the ‘Gross annual ($)’ box
  6. change the payment frequency if required
  7. click the save button
  8. log out of Member Online

 

If you have already emailed us a request to change your drawdown payments, you do not have to do anything – this will be processed for you and future payments adjusted accordingly.

 

Adjusting 2020-21 drawdowns

Our system has already noted your revised minimum payment.

If you have currently selected to receive the (existing or revised) minimum payment amount, this will automatically reduce your 2020-21 payment to the lower rate. You do not have to do anything to receive the reduced amounts from 1 July 2020.

If you have selected an amount above your minimum for 2019-20, we will use that same amount for 2020-21 (or round it up to the revised minimum if required).

You can adjust the payment amount by logging into Member Online 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 2020-21, if you want more than the revised minimum.

1 . Calculate your new annual drawdown amount

You will need to add the total payments you have received this financial year to the total payments you want to receive between now and 30 June 2020.

Total payments received can be found on the ‘Income Stream details’ page within Member Online (tip – just above your bank details at the bottom of the page).

Payments for the remained of the year can be determined by multiplying how much you need each payment by the number of payments left until 30 June. For example, as at 3 April there are 3 monthly and 6 fortnightly payments remaining so your total remaining payments would be 6 x $1,000 = $6,000 if you want $1,000 per month.

You can choose to change payment frequency as well, but remember to factor that into your payment calculations.

2. Tell us how much you want to drawdown by following these steps:

  1. log into Member Online
  2. select the ‘Income Stream details’ heading under ‘My account’
  3. select the ‘Edit details’ button at the bottom of the page
  4. select ‘Nominated Fixed Dollar Annual Amount’ as the nomination type
  5. enter your new annual drawdown amount you calculated above in the ‘Gross annual ($)’ box
  6. change the payment frequency if required
  7. click the save button
  8. log out of Member Online

AvSuper income stream checkup

AvSuper income stream bulletins

Phone 1300 128 751 (Local call)
Email:
avsinfo@avsuper.com.au