Your Income account and COVID-19

23 March 2020

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Reduced minimum payment limits available

To help individuals and households to work through share market volatility due to COVID-19, the Government is providing you with the option to reduce the minimum amount you receive as income from your account.

The age based minimum amounts will be reducing by up to 50% for the 2019-20 and 2020-21 financial years giving you the opportunity to keep more funds invested while receiving regular income payments.

This will give members the opportunity to keep more funds invested in their Income account while still receiving regular income payments.

 

When to consider this option

By reducing your regular payments you are not forced to take out more money than you need. This will give you the opportunity to keep more funds invested in your Income account while still receiving regular income payments.

You can choose to do this this financial year. Your chosen percentage will automatically apply from next financial year.

 

What are the reduced minimum payment limits proposed by the Government?

This is the minimum amount you must receive as income in any one financial year from your Income account. These minimums are based on your age and will be reduced by up to 50% for the 2019-20 and 2020-21 financial years.

The reduced minimum payment amounts are shown in the table below.

Minimum amounts 

 Age

Current minimum percentage of account balance 

Reduced minimum percentage of account balance for the 2019-20 and 2020-21 income years 

 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 and over 

 14%

 7%

 

The Government are also changing the social security deeming rates which may have an impact on the assistance payments you are able to access through Centrelink.  More information on this assistance is available from the Treasury.

 

Strategies for Income accounts in volatile markets 

If you’re in retirement, periods of high share market volatility can make you understandably anxious. Our default income stream set up has a cash allocation for Income account payments, placing 15% of your funds invested into our cash investment option. Usually, the remainder of your account is invested in medium to long term assets to support the longevity of your income stream.

This set up is specifically designed to manage situations of share market volatility.

Changing your investment allocation or switching to safer options, such as cash, in volatile markets will crystallise the losses incurred at current share market prices. This may place you in a position where you may miss out on generating growth when the market recovers.

If you are concerned, please speak to your trusted advisor or our Income account specialists from Skylight Financial Solutions. They can advise what’s best for you.

 

How to change your minimum payment limit

You can change your Income account payment amount by either filling in the Change Income account details form or calling us on 1800 692 877. 

Please note, next financial year the minimum percentage is the new lower percentage threshold. Therefore if you have chosen to receive the minimum amount, you will receive a lower amount. You can still choose to take a higher percentage at any time. 

If you've got any questions about reducing your Income account payments, fill in the form below.

We will do our best to respond to your request as quickly as possible. We are currently experiencing higher than normal enquiries so there will be a delay in our response. 

 

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