SMSF pension minimum drawdowns (2026–27)

Once an SMSF is paying a retirement-phase account-based pension, a minimum amount must be paid each financial year. The factors are set in Schedule 7 of the SIS Regulations and are identical for SMSFs, retail funds and industry funds. The temporary 50% reduction applied during the COVID years ended on 30 June 2023, and the standard factors have applied every year since — including 2026–27.

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01Standard minimum drawdown factors

02How the calculation works

The minimum is the relevant percentage of the member's pension account balance at 1 July of the financial year, using the member's age on that date. In the year a pension starts, use the starting balance and pro-rate by the days remaining in the financial year. The result is rounded to the nearest $10.

Example: a 67-year-old member with a $500,000 account-based pension balance at 1 July 2026 has a 5% minimum — $25,000 — to be paid by 30 June 2027. It can be taken as one lump sum, monthly, or on any other pattern; only the annual total matters for compliance.

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03Pensions starting part-way through the year

For a pension commencing mid-year, the minimum is the annual amount multiplied by the number of days from commencement to 30 June, divided by the days in the year. A pension commencing on or after 1 June can elect not to make a payment until the following financial year.

04What happens if you underpay

If the minimum is not met by 30 June, the income stream is treated as having ceased at the start of that year. Earnings on the assets supporting that pension lose their exempt status for the full year — taxed at 15% instead of 0% — and any payments made during the year are recharacterised as lump sums, which also affects transfer balance account reporting.

05Practical trustee tips

• Calculate the minimum on 1 July and diarise the payment schedule for the whole year.
• Pay slightly above the minimum to absorb rounding and timing differences.
• Make the final payment well before 30 June — the payment must leave the fund's bank account by that date, not merely be authorised.
• Keep clean bank evidence: pension payments must move from the fund account to the member's personal account.
• Confirm the correct age band each year, particularly for members turning 65, 75, 80, 85, 90 or 95.