The Government is making two changes to superannuation in response to the Coronavirus pandemic.
Account based pensions
The account based pension minimum percentages for this year and next will be halved. This amendment will allow those who have the capacity, to reduce how much they draw from their account based pension. If you are taking an account based pension – as per your age you need to take a certain percent as you age… keeps going up…
Early access provisions
Existing early access provisions have been relaxed allowing access to up to $10,000 in super savings in both this financial year and next.
To be eligible you must fit one or more of the following criteria:
• be unemployed
• entitled to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance
• have been made redundant on or after 1 January 2020
• had working hours reduced by 20 per cent or more
If you are a sole trader you are also eligible if business was suspended or there was a reduction in turnover of 20 per cent or more over the last six months.
APRA fund members will be able to apply online through myGov. The ATO will provide a copy of their favourable determination to your super fund which will make the payment directly. The ATO are yet to advise the procedure for Self Managed Super Funds.
Withdrawals will be tax free and will not affect Centrelink or Veterans' Affairs payments.
Only one application will be allowed in each year. If the full $10,000 is not applied for this year, the member cannot subsequently apply for the balance remaining this year but may apply for the full $10,000 again next year.
These measures are yet to be legislated and we will be in touch with you as they come into place.
If you have any other concerns or questions please don't hesitate to get in touch.
