A common question we receive is ‘When can I access my Super’? Fair enough! To be able to draw from your Superannuation, you need to meet a ‘condition of release’.
The conditions of release are as follows:
- Turning 65
- Reaching preservation age
- Starting a transition to a retirement income stream or other non-commutable pension
- Retiring from work
Above are the most common conditions of release that are met, and below are conditions of release for which super can be accessed before retirement or 65:
- Permanent incapacity
- Temporary incapacity
- Terminal medical illness
- Severe financial hardship
- Compassionate grounds
- Having a balance in a fund of less than $200
- Former temporary resident
Remember that there are always tax considerations when it comes to withdrawing Super, particularly when utilising a release prior to retirement. You may need to pay tax on a withdrawal that is made, so take that into account. Also, be aware of people offering to help you gain access to your super before you retire or reach 65 – many of these schemes are illegal.
Once you turn 65 years of age you have unrestricted access to your super, with no limit. You have the option of starting a pension where you are required to draw an annual minimum amount or you can withdraw as a lump sum payment. Unlike past years, you also have the option of keeping it in the accumulation phase, rather than being forced to withdraw.
Reaching preservation age
Preservation age depends upon a person’s date of birth, as set out in Table 1 .
Table 1: Reaching Preservation Age
|Date of birth
|Preservation age (years)
|Before 1 July 1960
|1 July 1960 – 30 June 1961
|1 July 1961 – 30 June 1962
|1 July 1962 – 30 June 1963
|1 July 1963 – 30 June 1964
|1 July 1963 – 30 June 1964
- Reaching preservation age and commencing a Transition to Retirement Income Stream (or other non-commutable income stream): once you have reached your preservation age, you can start a Transition to Retirement Income Stream even if you choose to continue working. This is ideal for those who want to begin working fewer hours in the approach to retirement, but need to supplement their living expenses. There is also an annual withdrawal limit of 10%.
- Reaching preservation age and retiring from work: In this circumstance, you need to have retired from work with no intention of returning. If you have met both of these conditions, you have unrestricted access to your superannuation, both in a lump sum or pension form, similar to turning 65.
Upon death, your super fund trustee normally pays your death benefits to one or more dependents (whether nominated or not) or to your estate. If the super fund is an SMSF, the remaining trustee (or the legal personal representative of the deceased where nominated, or where no trustee remains) is obligated to arrange the payment of a death benefit within a reasonable period of time.
A member of a super fund is taken to be suffering permanent incapacity if the member’s ill health (whether physical or mental) makes it unlikely that the member will engage in gainful employment for which they are reasonably qualified. This is determined by the trustee of the super fund.
This differs slightly from permanent incapacity in that the withdrawal must be taken from the super fund in the form of a non-commutable income stream and the ability to withdraw this income stream only lasts as long as the member remains incapacitated from the kind of work they were engaged in before the incapacity occurred.
Terminal Medical Illness
To access superannuation under this condition, the following circumstances must exist:
- Two registered medical practitioners have certified that the member suffers from an illness or has incurred an injury that is likely to result in the death of a person within a period not more than 12 months after the date of the certification (this period is known as the certification period)
- At least one of these registered medical practitioners must be a specialist in their field, relating to the illness or injury suffered by the member, and
- For both of these certificates, that the certification period has not ended
Severe Financial Hardship
If you have been receiving an eligible Dept of Human Services (previously Centrelink) income support payment for at least 26 weeks, you may be eligible to apply to the trustee of your fund for the early release of your super. Any withdrawal made under severe financial hardship is in the form of a lump sum, between $1,000 and $10,000, and you can only make one withdrawal from your super fund within any 12 month period.
The Dept of Human Services (DHS) administers the very limited circumstances upon which benefits may be released under compassionate grounds. Trustees of super funds must apply for permission from the DHS for any early super withdrawals under compassionate grounds. Examples of circumstances where claims are approved include the need to pay for medical treatment, medical transport, or care for a terminal medical condition, whether for the member or a dependent. Additionally, mortgage assistance or the need to pay for expenses associated with a dependent’s death is also included.
Less than $200 balance
If you have a balance of less than $200 with a Superfund, you are able to withdraw this with no restrictions.
Former Temporary Resident
If you earned Super while you were visiting Australia on a temporary visa (other than a retirement visa), you may be eligible to claim your Super once you leave Australia and your visa has expired or been cancelled. This type of withdrawal is known as a Departing Australia Super Payment (DASP).
As you can see, there are quite a few ways in which you can access your super, however, it’s definitely tailored towards either retirement, age, or need. If you have any queries on withdrawing your Super, please contact the Rivkin office at (02) 8302 3600.