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Extension of drawdown relief for Income Streams
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The Government has announced that it will continue to support self-funded retirees by extending the drawdown relief currently provided for income streams to the 2010/2011 year.
The minimum income payment is the amount that you must withdraw from your Income Stream during the financial year, which is calculated as a percentage of your account balance at 1 July each year.
The current 50% per cent reduction in the minimum payment amounts will continue to apply to ESSSuper’s Retirement Income Stream members until June 2011.
Calculating Minimum Payments
Minimum payments required to be made at least annually, are determined by age and the value of the account balance as at 1 July each year. Refer to the table below:
| Age |
Standard
minimum payment
% |
Temporary reduced
minimum payment
2010-2011
% |
| Under 65 |
4.0 |
2.0 |
| 65 |
5.0 |
2.5 |
| 75 |
6.0 |
3.0 |
| 80-84 |
7.0 |
3.5 |
| 85-89 |
9.0 |
4.5 |
| 90-94 |
11.0 |
5.5 |
| 95 or more |
14.0 |
7.0 |
How will this affect my current Income Stream payments?
As part of our end of financial year processes your Income Stream payment due on 15 July 2010 will be the same fortnightly amount you were receiving for the 2009/2010 financial year.
After this time, your payment percentage will be reviewed, and where required it will be increased to meet the minimum payment percentage based on your age (see table above). Your payments in the 2010/2011 financial year will be calculated based on your new percentage and your Income Stream balance at 1 July 2010.
We will write to all Income Stream members to allow them to select a level of income in late July.
If your current payment percentage is above the minimum requirement your payment percentage will remain un-changed; however your payments will be adjusted based on your balance at 1 July 2010.
Further Information
For further information about ESSSuper’s Retirement Income Stream:
9 July 2010
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