Retirement
Reduction in minimum super drawdown rates extended until 2023
Treasurer Josh Frydenberg pledged that the government would not increase taxes on superannuation if re-elected.
Reduction in minimum super drawdown rates extended until 2023
Treasurer Josh Frydenberg pledged that the government would not increase taxes on superannuation if re-elected.
The federal government has announced that it will extend the 50 per cent reduction to minimum superannuation drawdown requirements for retirees into the next financial year.
Originally announced in March 2020 as part of the government’s response to the pandemic, Treasurer Josh Frydenberg said the reduction would now remain in place until 30 June 2023.
“We recognise the valuable contribution self-funded retirees make to the Australian economy and the sacrifices they made to provide for their retirement,” Mr Frydenberg said.
“This will provide retirees with greater flexibility and certainty over their savings.”
Around 1.8 million super accounts are currently subject to the minimum drawdown requirements that apply to account-based pensions and similar products.
Under the reduced minimum drawdown rates, self-funded retirees aged between 65 and 74 must withdraw 2.5 per cent of their account balance each year to be eligible for tax-free status on their earnings.
The minimum drawdown rate is currently 3 per cent for ages 75 to 79; 3.5 per cent for ages 80 to 84; 4.5 per cent for ages 85 to 89; 5.5 per cent for ages 90 to 94; and 7 per cent for ages 95 and above, while a rate of 2 per cent applies to those under 65.
The government also renewed its commitment to not introduce any new taxes on super.
“At the last election, we promised there would be no new taxes on superannuation. Over the last three years we have honoured that commitment,” said Mr Frydenberg.
“At this election, we are again saying to retirees – under a Morrison government there will be no increased superannuation taxes.”
The government’s announcement was welcomed by Financial Services Council acting chief executive Blake Briggs, who said that stability in superannuation taxes was key to maintaining public confidence in Australia’s retirement system.
“Given recent volatility in financial markets the government’s commitment to extend the reduction in the minimum drawdown rate is positive as it will protect retirees from crystalising transitory reductions in their superannuation,” he said.
“The FSC is a strong advocate for stability in superannuation taxes so that consumers can plan their retirement with certainty. The FSC welcomes the government’s commitment to making no adverse changes to superannuation tax settings in the next term of the parliament.”
RELATED ARTICLES
Superannuation
Aware Super elevates tech leadership with strategic appointment of Richard Exton
Aware Super, one of Australia's largest industry super funds, has announced a pivotal appointment to its executive team, underscoring the growing importance of technology, data, and artificial ...Read more
Superannuation
Rest appoints Marina Pasika as interim head of private markets
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Marina Pasika as the Interim Head of Private Markets. This decision comes as the fund embarks ...Read more
Superannuation
Payday Super bill introduces new challenges for SMBs, reveals Employment Hero CEO
The introduction of the Payday Super bill to the Australian Parliament has sparked a significant response from the business community, particularly among small and medium-sized businesses (SMBs)Read more
Superannuation
Rest urges Parliament to expedite payday super legislation
In a significant move towards enhancing retirement outcomes for Australian workers, Rest, one of the country's largest profit-to-member superannuation funds, has expressed strong support for the ...Read more
Superannuation
Recalibrated super performance test aims to enhance accountability and investment opportunities
In a move that signals a shift rather than a cessation, Australia's government has announced a targeted review of the superannuation performance test. This recalibration, prompted by the latest ...Read more
Superannuation
Super performance test faces a fork balancing member value productive investment and regulatory trust
APRA’s latest superannuation performance test results have reignited a high‑stakes debate: does the test optimise member value or unintentionally curb long‑term investment in housing, infrastructure ...Read more
Superannuation
Aware Super unveils innovative digital tool to boost retirees' financial confidence
Aware Super has unveiled a groundbreaking digital advice tool, Retirement Manager, designed to empower retirees by addressing their most pressing financial concerns. Developed in collaboration with ...Read more
Superannuation
APRA's super shake-up: Balancing accountability and innovation in the next round
Australia’s performance test has forced long-overdue transparency in super and accelerated consolidation. But as the regime broadens, its blunt edges are colliding with investment complexity, ESG ...Read more
Superannuation
Aware Super elevates tech leadership with strategic appointment of Richard Exton
Aware Super, one of Australia's largest industry super funds, has announced a pivotal appointment to its executive team, underscoring the growing importance of technology, data, and artificial ...Read more
Superannuation
Rest appoints Marina Pasika as interim head of private markets
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Marina Pasika as the Interim Head of Private Markets. This decision comes as the fund embarks ...Read more
Superannuation
Payday Super bill introduces new challenges for SMBs, reveals Employment Hero CEO
The introduction of the Payday Super bill to the Australian Parliament has sparked a significant response from the business community, particularly among small and medium-sized businesses (SMBs)Read more
Superannuation
Rest urges Parliament to expedite payday super legislation
In a significant move towards enhancing retirement outcomes for Australian workers, Rest, one of the country's largest profit-to-member superannuation funds, has expressed strong support for the ...Read more
Superannuation
Recalibrated super performance test aims to enhance accountability and investment opportunities
In a move that signals a shift rather than a cessation, Australia's government has announced a targeted review of the superannuation performance test. This recalibration, prompted by the latest ...Read more
Superannuation
Super performance test faces a fork balancing member value productive investment and regulatory trust
APRA’s latest superannuation performance test results have reignited a high‑stakes debate: does the test optimise member value or unintentionally curb long‑term investment in housing, infrastructure ...Read more
Superannuation
Aware Super unveils innovative digital tool to boost retirees' financial confidence
Aware Super has unveiled a groundbreaking digital advice tool, Retirement Manager, designed to empower retirees by addressing their most pressing financial concerns. Developed in collaboration with ...Read more
Superannuation
APRA's super shake-up: Balancing accountability and innovation in the next round
Australia’s performance test has forced long-overdue transparency in super and accelerated consolidation. But as the regime broadens, its blunt edges are colliding with investment complexity, ESG ...Read more
