News: Extra government assistance for self funded retirees

31th May 2009

As part of the Federal Budget the Government annonced an extension to the allocated pension drawdown reduction and the addition of the "Seniors Supplement" being made available to more people.

Allocated Pension

Allocated pensions have to drawdown a minimum of the account balance each year. On the 18th of February 2009 the Federal Government announced the minimums where halfed for the remainder of the 2008/2009 financial year.

In the budget the minimum pension drawdown requirements have been halfed again for the next financial year before reverting back to the normal levels on the 1st of July 2010.

The drawdown limits are:

Age at start of pension and each 1 July	Original percentage of account balance (pa)	Reduced drawdown % for 2009/10
Under 65	4%	2.0%
65-74	5%	2.5%
75-79	6%	3.0%
80-84	7%	3.5%
85-89	9%	4.5%
90-94	11%	5.5%
95 or more	14%	7.0%

This means that for the next 12 months self funded retirees have the choice to draw down a lower income payment to allow their investments to remain invested to recover from the current investment downturn.

Senior's Supplement

The new senior's supplement is a combination of several current allowances including the utilities allowance, telephone allowance and more. At the new rates it will pay $790.40 a year for singles and $1190.80 a year for couples combined. Payments will be made quarterly.

To gain access to the Senior's Supplement you need to qualify for the Commonwealth Seniors Health Card. The main qualifing criteria is:

Be of aged pension age
Not be receiving the aged pension
Have an adjusted taxable income of $50,000 for singles and $80,000 for couples.

The adjusted taxable income was to have included the drawdowns from an allocated pension, but the government has decided not to proceed with this recommendation.

If you meet the criteria and have not yet contacted Centrelink to test your eligability, then contact them on 13 23 00.