SMSF pension minimum drawdowns for 2025–26: rates and how to calculate them

Once an SMSF is paying a retirement-phase account-based pension, a minimum amount must be paid each financial year. The rates are set in Schedule 7 of the SIS Regulations and are the same for SMSFs as they are for retail and industry funds. From 1 July 2023 the standard (non-COVID) rates resumed.

Standard minimum drawdown rates

• Under 65: 4%
• 65 to 74: 5%
• 75 to 79: 6%
• 80 to 84: 7%
• 85 to 89: 9%
• 90 to 94: 11%
• 95 and over: 14%

How the calculation works

The minimum is calculated as the relevant percentage of the member's pension account balance at 1 July of the financial year (or, in the year a pension starts, the starting balance — pro-rated by 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 2025 has a 5% minimum, or $25,000, to be paid by 30 June 2026. They can take it as a lump sum, monthly, or any other pattern — only the annual total matters for compliance.

Pensions starting part-way through the year

For a pension that starts mid-year, the minimum is pro-rated based on the number of days remaining in the financial year. A pension starting on or after 1 June can elect not to make a payment until the next financial year.

What happens if you underpay

If the minimum is not met by 30 June, the income stream is treated as having ceased on 1 July of that year. That means earnings on the assets supporting that pension lose their tax-exempt status (ECPI) for the full year — they're taxed at 15% instead of 0%. The ATO has a limited self-assessment concession allowing trustees to ignore an underpayment of 1/12 or less of the annual minimum if certain conditions are met.

Practical trustee tips

• Calculate the minimum at the start of the year and diarise the payments
• Pay slightly more than the minimum to leave a buffer for rounding errors
• Don't move pension cash into a personal account before the payment is recorded — keep clean bank evidence
• Confirm the right age band applies on each member's birthday

Source: Australian Taxation Office — Minimum annual payments for super income streams; Schedule 7, Superannuation Industry (Supervision) Regulations 1994 (ato.gov.au).