The National Treasury has gazetted new directions which expand access to living annuity funds.
Treasury said that the relief measure will result in individuals who receive funds from a living annuity being temporarily allowed to immediately either increase (up to a maximum of 20% from 17.5%) or decrease (down to a minimum of 0.5% from 2.5%) the proportion they receive as annuity income.
“This will assist individuals who either need cash flow immediately or who do not want to be forced to sell after their investments have underperformed,” Treasury said.
“As a result, living annuity members can now approach their financial sector providers to adjust the proportion they receive as annuity income, instead of waiting up to one year until their next contract anniversary date.”
In addition to the above, the minimum value of the annuity or part of the retirement interest which an individual can withdraw in the event that there was any previous lumpsum commutation in the fund was amended and replaced with a single threshold of R125,000.
The directives form part of a range of financial and tax measure introduced by the government to assist South Africans during the coronavirus.
Treasury said it will table a new special budget on 24 June to formalise plans around a stimulus package to help the country fight the coronavirus.
On 21 April, President Cyril Ramaphosa announced a R500 billion fiscal support package that includes spending towards Covid-19 priorities.
Part of the funding sources for this package is a R130 billion baseline reprioritisation in the 2020/21 financial year.