Covid-19 – Reduction in Minimum Drawdown Rates

The Government is helping retirees to manage the impact of volatility in financial markets on their retirement savings by temporarily reducing superannuation minimum drawdown requirements. The Government is also reducing social security deeming rates in recognition of the impact of the low interest rates on savings.

Summary

The Government is temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50 per cent for the 2019-20 and 2020-21 income years. 

The Government is also reducing both the upper and lower social security deeming rates by a further

0.25 percentage points in addition to the 0.5 percentage point reduction to both rates announced on 12 March 2020.

Temporary Reduction in Minimum Drawdown Requirements

This measure will benefit retirees with account-based pensions and similar products by reducing the need to sell investment assets to fund minimum drawdown requirements.

The reduction applies for the 2019-20 and 2020-21 income years. 

Age Default minimum
drawdown rates (%) 
Reduced % for
2019/20 & 2020-21
Under 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 more 14 7

This measure will have no impact on the underlying cash balance for 2019-20 and a negligible impact in 2020-21.