Minimum Pension Payments for the 2008/2009 Financial Year
You may be aware of proposed changes to the minimum pension payment requirements for Account-Based Retirement Income Streams/Allocated Pensions for the remainder of the 2008/2009 financial year. The proposed changes are summarised as follows:
- The Government has announced that where desired, people receiving income payments from Allocated, Account-Based and Market-Linked income streams will only need to take 50% of their government prescribed minimum annual income requirement.
- At this stage it is understood that the 50% reduction to the minimum income amount will only apply for the 2008/09 tax year.
- This means that income recipients who have already received at least half the minimum payment amount in this tax year can choose to suspend income payments for the balance of this financial year.
- At this stage it is our understanding that the 50% reduction will apply to all the above income streams in existence at 1 July 2008 or commenced throughout the entire 2008/09 tax year (note: if commenced on or after 1 June no minimum income is required in 2008/09).
It is important to note that the minimum pension required for the year has not been waived entirely but has been reduced by 50%.
If you think that these changes are likely to have an impact on your current strategy, then please ring us to discuss the matter.