Super changes from July 2021
Transfer balance cap indexation
The transfer balance cap is a lifetime limit on the total amount of money that can be transferred from your super to any of your pension accounts. All pension accounts (excluding TTR) and death benefit income streams count towards your transfer balance cap, including any accounts you hold elsewhere.
From 1 July 2021, the transfer balance cap will be indexed. That means there won’t be a single cap that applies to everyone. Instead, everyone will have a personal transfer balance cap between $1.6 million and $1.7 million, depending on their circumstances.
How it will affect you
Members starting their first pension on or after 1 July 2021 will have a personal transfer balance cap of $1.7 million.
Members who had a personal transfer balance account before 1 July 2021 will have a personal transfer balance cap calculated proportionally, based on the highest balance of their transfer balance account:
- $1.6 million if, at any time between 1 July 2017 and 30 June 2021, the balance of their account was $1.6 million or more; or
- between $1.6 and $1.7 million in all other cases, based on the highest ever balance of their transfer balance account.
Visit ATO Online (myGov) to see if your personal transfer balance cap will be proportionally indexed.
Other caps affected
Indexation of the transfer balance cap can affect other caps and limits including:
- total super balance (sum of your super and retirement phase accounts) threshold, also increasing from $1.6 to $1.7 million
- non-concessional contribution rules and bring forward rule eligibility
- government co-contributions eligibility
- spouse contributions eligibility
- defined benefit income stream special value calculation (cap increases from $100,000 to $106,250).
Pension members – minimum drawdown reversion
Each year, you’re required to withdraw a minimum income from your pension account. In March 2020, as part of the Government’s response to the financial impacts of COVID-19, the Government announced a temporary reduction in the minimum drawdown (withdrawal) rates. The aim of this measure was to counter the negative impact on pension account balances – leaving more in your account for later.
For Flexi Pension and Transition to Retirement (TTR) members, the minimum drawdown rates were reduced by 50 per cent for the financial years 2019-20 (post 25 March 2020) and 2020-21.
On 1 July 2021, this temporary measure ends, and the normal drawdown rates will be reinstated for payments received annually between 1 July and 30 June each financial year.
These reinstated rates are:
- under 65: 4%
- 65–74: 5%
- 75–79: 6%
- 80–84: 7%
- 85–89: 9%
- 90–94: 11%
- 95 or more: 14%
If you’d like to make changes to your pension payment frequency and/or amounts or, you’d like more information about the minimum drawdown rates, please call 1800 331 685 or contact us.
Invite your family over to UniSuper and help put them on a path to a secure future with a Personal Account. Joining is as easy as firing up the barbecue!
Give them access to the same features you receive, including strong investment performance*, some of the lowest fees in the industry, and the security of a multi-award-winning fund.