On March 22nd the Federal Government announced a raft of changes in their financial aid package to assist anyone adversely affected by COVID-19 pandemic. Among those changes was the announcement of special access to superannuation funds and changes to the minimum pension requirements for 2019/2020 and 2020/2021.
Early Access to Superannuation
Special access to superannuation balances will be available for anyone who has experienced a significant reduction in their income or are now unemployed. Each eligible person can access up to $10,000 before 1st July 2020. A further $10,000 is available from the 1st July 2020
To be eligible for the early release of funds, the person need to be:
- Unemployed or
- Eligible to receive a Job Seeker Payment, youth allowance for job seekers, parenting payment, special benefit or Farm Household Allowance or
- On or after January 2020
- Made redundant or
- Had their working hours reduced by 20% or more or
- For sole trader, their business was suspended or there was a reduction in the business’s turnover of 20% or more
The formal arrangements are pending, however it is critical for SMSF trustees to ensure a release authority has been received from the ATO. The process will require using the myGov portal to request an early access payment.
Reduction of Minimum Drawdown Requirements
In addition to the ability to have an early access payment, members in the pension phase have the ability to take half the required minimum pension payment for the 2020 and 2021 financial years. This is to preserve money in superannuation that has been affected by substantial falls.
If you have any further questions, please consult the ATO website or give Ben or Michael a call on 1800 767 329