What retirees need to know about minimum pension drawdowns

Australians who wish to boost their partner's super cannot directly transfer money from one account to another.

Australians who wish to boost their partner's super cannot directly transfer money from one account to another. Photo: Getty

Question 1: I turn 75 in December. Does my drawdown increase on my first payment after my 75th birthday, or the first payment in July 2023?

Most superannuation income streams (allocated pensions) require a ‘minimum’ amount to be drawn down each year. This amount is based on your age and your account balance.

This amount is set when you start the pension and then re-calculated every July 1 each year.

Minimum pension drawdown amounts were halved during the pandemic and will stay at these levels in 2022-2023 – as the table below shows:

Your drawdown amount does not get recalculated until July 1 the following year, even if you move into a new age bracket.

For example, if you had a balance of $300,000 in your super income stream on July 1, 2021, and were aged 74, your minimum pension payments for the financial year would be $7500 ($300,000 x 2.5 per cent).

If on July 1, 2022 (when you are 75), and your balance is, say, $310,000 (due to positive earnings), your new minimum drawdown amount would $9300 ($310,000 x 3 per cent). 

Question 2: Can I transfer my current superannuation balance into my wife’s super fund, even if I have already withdrawn some funds from it? I am 73 and my wife is 62.

You cannot transfer super between different account holders.

You can cash out some, or all, of your super and recontribute it into your wife’s super.

There are contribution caps regarding how much you can contribute – you can check these with your wife’s super fund. 

Question 3: I have $650,000 in super and $100,000 in shares. These are my only assets. I don’t own any property. I live with my partner in his home. He has significantly more assets ($3 million +). I pay $800 each month towards living costs ($400 food, $400 house/ living expenses)   

1. Am I eligible for the aged pension or seniors health card? 2. Do my partner’s assets impact my situation regarding Q1? Thanks, Peter   

Hi Peter,

Firstly, Centrelink will need to determine whether you are a ‘member of a couple’.

In determining if a person is a member of a couple, consideration is given to the following five factors:

  • The financial aspects of the relationship
  • The nature of the household
  • The social aspects of the relationship
  • Any sexual relationship between the people
  • The nature of the people’s commitment to each other.

Under the assets test, if you are determined to be a member of a couple, the total assets of both partners are assessed. Under the income test, income is combined, and you are assumed to receive 50 per cent.

As you can see, if they determine you to be a member of a couple then you will be assumed to have too many assets to be eligible for the age pension. However, there is no asset test for the Commonwealth Seniors Health Card and a generous income test, so it still would be worth applying.

If you are classified as single, you would be eligible for a small part age pension.

As there is no one determining factor, I suggest speaking to Centrelink’s ‘Financial Information Service’.

Craig Sankey is a licensed financial adviser and head of Technical Services & Advice Enablement at Industry Fund Services

Disclaimer: The responses provided are general in nature, and while they are prompted by the questions asked, they have been prepared without taking into consideration all your objectives, financial situation or needs.

Before relying on any of the information, please ensure that you consider the appropriateness of the information for your objectives, financial situation or needs. To the extent that it is permitted by law, no responsibility for errors or omissions is accepted by IFS and its representatives. 

The New Daily is owned by Industry Super Holdings

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