SMSF minimum pension: how the percentage works
Last reviewed 26 September 2026. Checked again each 1 July.
The short answer
Each financial year, an account-based pension from an SMSF must pay the member at least a minimum amount. It’s the pension balance on 1 July multiplied by a percentage that depends on the member’s age, from 4% for under-65s to 14% for people aged 95 or older. It’s rounded to the nearest $10.
The percentages, by age
These are the standard percentages, which have applied since the 2023–24 financial year:
| Member’s age | Minimum each year |
|---|---|
| Under 65 | 4% of the balance |
| 65 to 74 | 5% of the balance |
| 75 to 79 | 6% of the balance |
| 80 to 84 | 7% of the balance |
| 85 to 89 | 9% of the balance |
| 90 to 94 | 11% of the balance |
| 95 or older | 14% of the balance |
The government has temporarily reduced these percentages before. Most recently they were halved from 2019–20 to 2022–23, and the full rates returned from 2023–24.
Which age and which balance
- Age: the member’s age on 1 July. In the year a pension starts, it’s their age on the start day.
- Balance: the pension account balance on 1 July. In the year a pension starts, it’s the balance on the start day.
A pension that starts part-way through the year
In the first year, the minimum is reduced in proportion to the days left in the financial year, counting the start day. Multiply the full-year minimum by the days remaining, then divide by 365 (or 366 in a leap year).
If a pension starts on or after 1 June, no minimum payment is needed for that financial year.
Rounding
The result is rounded to the nearest $10. An amount ending in exactly $5 is rounded up.
Two worked examples
These use made-up people and balances.
- Margaret is 72 on 1 July, and her pension balance that day is $600,000. At 5%, her minimum for the year is $30,000.
- Tom starts a pension on 1 January 2027, aged 66, with $250,000. The full-year minimum at 5% would be $12,500. There are 181 days from 1 January to 30 June 2027, so the minimum for this first year is $12,500 × 181 ÷ 365 = $6,198.63, which rounds to $6,200.
When the payments count
The payments must actually reach the member by 30 June. If 30 June falls on a weekend or public holiday, pay earlier. A lump-sum withdrawal from the pension (a “partial commutation”) doesn’t count towards the minimum.
A transition to retirement pension, for someone still working, has the same minimum and also a maximum of 10% of the balance each year.
What happens if the minimum isn’t paid
The ATO treats the pension as having stopped at the start of that financial year for tax purposes. The fund can lose the tax exemption on earnings from the assets supporting that pension, a new pension has to be started, and there are extra reports to lodge with the ATO. In limited circumstances the ATO may allow the pension to continue. That’s why it’s worth checking well before 30 June, not after.
How SMSF Cockpit helps, and where it stops
The Pension Minimum tracker records each pension member’s balance, start date and payments for the year. It works out the minimum using the rules on this page (the age, the balance, a mid-year start, the 1 June rule and the rounding), and shows whether payments are on track to reach it by 30 June. The trustee checklist includes it as one of the year’s tasks.
What it doesn’t do: it handles one pension per member per year. It doesn’t model lump-sum withdrawals from a pension, a pension that passes to someone else after a death, or a member with several pensions. Its “on track” guide (how much would have been paid by now if payments were spread evenly) is the app’s own guide, not a legal test. Confirm the required amount with your accountant.
Sources
This guide is general information only. It’s not financial, tax or legal advice, and it doesn’t consider your fund’s circumstances or its trust deed. SMSF Cockpit doesn’t lodge anything with the ATO, and it doesn’t track your investments, prices or cash balances. For advice about your fund, speak to a licensed adviser, your accountant or a lawyer.