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Individuals can now choose to access more income from their living annuity, should they need more cash flow as they face the financial impact of Covid-19.
The notices allowing this were gazetted by Finance Minister Tito Mboweni on Monday, as part of tax measures rolled out to combat the Covid-19 pandemic.
A living annuity is a financial product that pays you an income from your retirement savings.
Individuals receiving income from a living annuity fund can either choose to increase access to as much as 20%, or decrease their access to 0.5%, depending on their needs, according to the notice. Legislation had required that you access between 2.5% and 17.5% of your annuity income, per year.
"This will assist individuals who either need cash flow immediately or who do not want to be forced to sell after their investments have under-performed.
"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," Treasury said.
Treasury also amended the threshold at which individuals can withdraw their retirement benefit as a full cash lump sum, to R125 000.
Government has set aside a R500 billion fiscal package to help buoy the economy amid the challenges of Covid-19. Of this amount, R200 billion is attributed to a loan guarantee scheme to assist businesses, and which has already been launched. Tax relief measures part of the package amount to R70 billion and include deferrals of some tax payments such as carbon tax and excise duties.
The finance minister is yet to table an adjusted budget detailing how R130 billion of the package will be reprioritised from the existing budget.
