Superannuation

Minimum Pension Drawdown Increase

In response to COVID-19, the government temporarily reduced superannuation minimum drawdown requirements for account-based pensions.

From 1 July 2023 the 50% reduction in the minimum pension drawdown rate will no longer apply. This means that on 1 July 2023 the minimum annual payment on your pension balance the following factors will apply:

The minimum annual payment amount is worked out by multiplying the member’s pension account balance by the applicable percentage factor above.

The amount is rounded to the nearest 10 whole dollars. If the amount ends in an exact five dollars, it is rounded up to the next 10 whole dollars.

The member's age is determined at either:

• 1 July in the financial year in which the payment is made, or
• the commencement day of the pension or annuity, if that is the year in which it commences.

Account balance means one of the following:

• the pension account balance on 1 July in the financial year in which the payment is made
• the balance on the pension commencement day, if the pension commenced during the financial year
• the amount of the withdrawal benefit, if the amount of the pension account balance is less than the withdrawal benefit that the member would be entitled to if the pension were to be fully commuted.

Where the pension commences after 1 July, the minimum payment amount for the first year is calculated proportionately to the number of days remaining in the financial year, starting from the commencement day.

Concessional Contributions Cap

Concessional contributions are contributions that you or your employer make to your super with before-tax income or claim as a tax deduction. They are also referred to as employer or before-tax contributions .the maximum tax deductible contribution in this 2023-24 year is $27,500 which is unchanged from the previous year .

Note that from 1 July 2018, if you do not use all of your concessional cap, you may be able to carry forward any unused amounts and increase your cap in future years (if you are eligible – less than $500,000 in super).

Non-Concessional Contributions Cap

Non-concessional contributions are contributions you or your spouse make to your super from your after-tax income. They are also referred to as personal or after-tax voluntary contributions. The maximum contribution is 4110,000 unchanged from the previous year

Anyone that has super worth over their total superannuation cap is not eligible to make non-concessional contributions to super.

Depending on your total superannuation balance, if you’re aged under 75, you may be able to bring forward up to two years of contributions, giving you a total maximum non-concessional cap of $330,000 for the three years.