New temporary changes to superannuation benefits

The Government has announced a package of measures to provide assistance to Australians financially impacted by the Coronavirus (COVID-19). This includes two measures relevant to super:

  • a temporary early release of super, a single payment of up to $10,000 in the 2019/2020 and 2020/2021 financial years; and
  • a temporary reduction in super pension minimum drawdown rates. 

Temporary early release of super

The early release of super changes will be available for your clients to apply via the ATO from Monday 20 April 2020.

Who is eligible?

To apply for this, your client must satisfy any one or more of the following requirements:

At the time of application they were:

  • unemployed; or
  • eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (including single and partnered payments), special benefit or farm household allowance; or

On or after 1 January 2020:

  • they were made redundant; or
  • their working hours were reduced by 20% or more; or
  • if they’re a sole trader – their business was suspended or there was a reduction in turnover of 20% or more.

How much super can be accessed?

If your client is eligible, they’ll be able to access a single payment up to and capped at $10,000 of their super in the 2019/2020 financial year and similarly, another single payment in the 2020/2021 financial year. They can apply for any amount up to $10,000 in each financial year and these withdrawals will be tax free. Applications for the 2020/2021 financial year will cease from 24 September 2020.

How can clients access this?

They’ll be able to apply to the ATO via myGov for early release of superannuation from Monday 20 April 2020. 

The ATO will consider each application and advise if it’s approved or declined. For approved applications, the ATO will provide a copy of your client’s application to their nominated super fund, and a payment will then be made by the super fund to your client.  Your client must apply directly to the ATO via myGov and not their super fund.

My clients have an SMSF. Can they access their super early?

This process doesn’t apply to members of a SMSF. Separate arrangements will apply for individuals who want to release funds from their SMSF. This will be confirmed at a later date.

Temporary reduction of super pension minimum drawdown rates

The Government has introduced relief that will allow the minimum pension payment your clients receive in 2019/2020 and 2020/21 to be reduced. This is in recognition of the decline in account balances that they may have experienced due to recent market conditions. 

The relief will allow the minimum pension payment your clients receive in 2019/2020 to be halved (e.g. if your minimum pension amount for 2019/20 was $12,000 it can be reduced to $6,000). Note: if your client has already received more than the reduced minimum, we cannot reverse pension payments.

The existing and reduced minimum pension payment rates for account-based pensions are as per the table below.

Age (as at the later of 1 July of the current year or the date your account was setup) Existing default minimum pension payment rates for the 2019/​20 financial year Reduced minimum pension payment rates for the 2019/​20 and 2020/​21 financial years 
Less than 65
4%
2%
65 to 74
5%
2.5%
75 to 79 6% 3%
80 to 84
7%
3.5%
85 to 89
9%
4.5%
90 to 94
11%
5.5%
95 or more
14%
7%

We understand that some members will not want to reduce their pension payments. As a result, we don’t intend to apply the reduced minimum to your client’s account automatically. 

Instructions for changing your clients  pension payments are available here.

How to view a list of your pension clients

To view a list of your pension clients and their pension details on AdviserWrap:

  • from the homepage, click on My Business > Reports > Client Listing  
  • from here you can filter your clients by product type ‘PP’ (Pension Plan)

How to view a list of your pension clients

To view a list of your pension clients and their pension details on AdviserNET:

  • from the homepage, click on Accounts > Select account
  • from the Account dropdown menu, select the relevant pension account typeor click Select  multiple and select multiple account types at once   
  • click on Search
  • click on the View button on the search results toolbar and select Pension details from the dropdown menu

The Pension details screen will display and you can easily move between the group of clients you have selected using the <Prev and Next> links. 

How to view a list of your pension clients

To view a list of your pension clients and their pension details on Panorama Online:

  • from the home page, click on the Clients icon on the left panel
  • click on the square filter icon and select Pension and Pension TTR
  • click on Update

We're here to help

For more information visit our dedicated COVID-19 page for Advisers or the ATO’s dedicated page at ato.gov.au/coronavirus. If you have questions you can contact us in one of the following ways:

Information current as at 30 March 2020.

This communication has been prepared for use by advisers only.  It must not be made available to any client and any information in it must not be communicated to any client. This document provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.  This information does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness, having regard to these factors before acting on it.

BT Portfolio Services Ltd ABN 73 095 055 208 AFSL 233715 (BTPS) administers Panorama Super. BT Funds Management Limited ABN 63 002 916 458 AFSL 233724 (BTFM) is the trustee and issuer of Panorama Super, which is part of Retirement Wrap ABN 39 827 542 991. Westpac Financial Services Ltd ABN 20 000 241 127 AFSL 233716 (WFSL) is the responsible entity and issuer of interests in BT Managed Portfolios. BTPS operates Panorama Investments.  Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714 (Westpac) is the issuer of the BT Cash Management Account (BT CMA) and the BT Cash Management Account Saver (BT CMA Saver). Together, these products are referred to as the Panorama products.  In addition, BTPS is the provider of the Panorama SMSF Establishment Service and the Panorama SMSF Administration Service. The Guide and Terms and Conditions for these services are available by contacting BTPS.  BTPS administers BT SuperWrap Personal Plan, SuperWrap Pension Plan, BT SuperWrap Open Pension and BT Compact SuperWrap Pension (collectively, SuperWrap Products). BTFM is the trustee of Retirement Wrap and issuer of SuperWrap Products.   BTFM is the trustee and issuer of Asgard eWRAP Super/Pension, Asgard Infinity eWRAP Super/Pension, Asgard Open eWRAP Pension, Asgard Infinity eWRAP Pension, Asgard Managed Profiles and Separately Managed Account – Funds Super and Asgard Elements Super (collectively, Asgard Products). Asgard Capital Management Limited ABN 92 009 279 592, AFSL Number 240695 (Asgard) is the administrator and custodian of the Asgard Products. 

A Product Disclosure Statement or other disclosure document (PDS) for the Panorama products and the SuperWrap products can be obtained by contacting BT on 1300 783 143 or by visiting bt.com.au.   A PDS for the Asgard Products can be obtained by contacting Asgard on 1800 731 804or by visiting asgard.com.au. A retail client should obtain and consider the relevant PDS before deciding whether to acquire, continue to hold or dispose of interests in a Panorama product, SuperWrap product or Asgard Product.

BTPS, BTFM, Asgard and WFSL are subsidiaries of Westpac. Apart from any interest investors may have in Westpac term deposits, Westpac securities, the BT CMA, or the BT CMA Saver acquired through the Panorama operating system, an investment acquired using the Panorama operating system or an Asgard Product or SuperWrap product is not an investment in, deposit with or any other liability of Westpac or any other company in the Westpac Group. These investments are subject to investment risk, including possible delays in repayment of withdrawal proceeds and loss of income and principal invested. Westpac and its related entities do not stand behind or otherwise guarantee the capital value or investment performance of any investments acquired through the Panorama operating system or any investments in, or acquired through, Asgard generally or through a SuperWrap product.

Superannuation is a means of saving for retirement, which is, in part, compulsory. The Government has placed restrictions on when you can access your investments held in superannuation. The Government has set caps on the amount of money that you can add to your superannuation each year and over your lifetime on both a concessional and non-concessional tax basis.  There will be tax consequences if you breach these caps.  For more detail, speak with a registered tax agent or visit the ATO website.

Each of BTPS, BTFM, WFSL and Westpac cannot give tax advice. Any tax considerations outlined in this document are general statements, based on an interpretation of current tax laws, and do not constitute tax advice. As such, you should not place reliance on any such taxation considerations as a basis for making your decision with respect to the product.

This information may contain material provided by third parties derived from sources believed to be accurate at its issue date. While such material is published with necessary permission, the Westpac Group accepts no responsibility for the accuracy or completeness of, nor does it endorse any such third party material. To the maximum extent permitted by law, we intend by this notice to exclude liability for this third party material.