Extension to temporary Pension drawdown rates Jun 17, 2021

Smiling mature couple embracing near their leisure vehicle at campsite

The Government has announced that the current reduced minimum pension drawdown rates will be extended for a further year to 30 June 2022.

The one-year extension to this arrangement means pension payments will remain on the same  rates (as per Table 1) from 1 July 2021 until 30 June 2022. 

Table 1 – Minimum annual pension income per age group, as a percentage of account balance

AgeTemporary minimum rates for
2019/20, 2020/21 and 2021/22
Standard rates (in place from 1 July 2022)
Under 65 2%4%
95 or more7%14%

The minimum annual pension payment rates were initially reduced last year to help retirees manage the impact of volatile financial markets. The reduced rates enable those with pension accounts to keep more of their savings invested for longer. 

Prime Minister Scott Morrison said the extension will help retirees who are still managing the losses experienced in financial markets in the peak of the COVID-19 pandemic.

If you wish to change your pension payments over and above the reduced rates, you will need to complete and submit a Pension Election Form to ensure you receive your preferred payments.

It’s also worth noting that in 2020/21 there were 27 fortnightly pension payment instalments. In 2021/22, there will be 26 fortnightly instalments, which will result in a higher fortnightly payment.