The money in your superannuation account is intended for your retirement and generally can’t be accessed until certain legal conditions are met.
If you are seeking to access your super, the three things you need to focus on are (i) the type of benefits you have in your account, (ii) whether you meet a condition of release, and (iii) your preservation age.
In broad terms, the money held in your super account will be categorised as either preserved or non-preserved. As the name implies, preserved benefits cannot be touched until the law and your fund’s trust deed allows them to be paid.
Preserved benefits include:
- all contributions made by or on behalf of a member,
- all earnings since 30 June 1999, and
- all employer eligible termination payments (ETPs) rolled over into a super fund after 30 June 2004.
Preserved benefits may be cashed voluntarily only if a condition of release is met and subject to any cashing restrictions imposed by the superannuation laws.
However not all benefits are preserved. Restricted non-preserved benefits, for example, can be cashed if the member meets a condition of release specific to these benefits. This money usually stems from employment-related contributions (other than employer contributions) made before 1 July 1999 or to rolled-over employer ETPs made before 1 July 2004. They can generally be cashed once the employment they relate to has been terminated.
Some members will also have unrestricted non-preserved benefits. These benefits don’t require a condition of release to be met and may be paid upon request to the member. Often these benefits arise when a member has previously satisfied a condition of release but decides to hold the money in their superannuation account.
Accessing your benefits
A person can access their super benefits when:
- they have reached preservation age, and
- a condition of release has been met.
A person’s preservation age ranges between 55 and 60 depending on their date of birth.
| Determining your preservation age | |
|---|---|
| Date of birth | Preservation age |
| Before 1 July 1960 | 55 |
| 1 July 1960 - 30 June 1961 | 56 |
| 1 July 1961 - 30 June 1962 | 57 |
| 1 July 1962 - 30 June 1963 | 58 |
| 1 July 1963 - 30 June 1964 | 59 |
| After 1 July 1964 | 60 |
Unlike other superannuation rules, your preservation age is reached on the date of your birthday, not the financial year in which you reach your preservation age.
Conditions of release
When you satisfy a condition of release, your preserved and restricted non-preserved benefits become unrestricted and you can access your super.
The most common conditions of release are:
- Retirement: Actual retirement depends on a person’s age and future employment intentions. Even if a person decides to retire from the workforce, they won’t be able to access their preserved benefits until they reach their preservation age.
- Transition to retirement arrangements: Members who are under 65 and have reached preservation age may access their benefits as a non-commutable income stream.
- Attaining age 65: A member who reaches age 65 may cash their benefits at any time.
For other conditions of release, there may be restrictions on how the benefits can be taken.
| Conditions of Release & Cashing Restrictions | |
|---|---|
| Condition of Release | Cashing Restrictions |
| Retirement | Nil |
| Attaining preservation age | Any of the following: (i) transition to retirement pension, (ii) non-commutable pension, or (iii) non-commutable annuity. |
| Attaining age 65 | Nil |
| Death | Nil |
| Terminal medical condition | Nil |
| Permanent Incapacity | Nil |
| Temporary incapacity | Must be a non-commutable income stream for continuing the gain or reward the person was receiving previously and not exceed the period of incapacity. |
| Preserved super benefit worth less than $200 | Nil |
| Temporary resident leaving Australia permanently | Withdrawal benefit can be paid as either (i) a single lump sum, or (ii) a transfer, rollover or contribution that ensures the amount is cashed. |
| Severe financial hardship | Assuming the financial hardship tests are met, the person may take a single lump sum payment of between $1,000 and $10,000 every 12 months. |
| Compassionate grounds | Taking into account the person's financial capacity, a single lump sum that (i) is reasonably required, and (ii) does not exceed 3 months' loan repayments or 12 months interest on the outstanding loan balance. |
| Termination of gainful employment | For preserved benefits: non-commutable lifetime pension or annuity. For restricted non-preserved benefits: Nil |
Other requirements to access your benefits
Apart from cashing restrictions, you may also need to consider other timing and evidentiary requirements.
- For terminal medical conditions, the member will need need two medical practitioners (one of whom is a specialist) to certify that the person is unlikely to live for more than 12 months.
- Requests to access super on compassionate grounds are administered by the Department of Human Services. There are five main categories under which claims can be made:
- medical treatment or transport (including dental);
- mortgage assistance (if you need to prevent your home being sold by the mortgage lender);
- care for a terminal medical condition (e.g. to pay for palliative care);
- modifications to a home or motor vehicle for someone with a severe disability;
- funeral expenses.
- To access super on the basis of severe financial hardship, the member needs to meet the following rules:
- have received Commonwealth Government income support continuously for at least 26 weeks;
- satisfy the super trustees that they can’t meet immediate family expenses;
- draw no more than $10,000 (including tax) in any 12-month period;
- if the member has reached preservation age, they may be able to receive their entire superannuation benefit provided they have been on government income support for at least 39 weeks.
As these rules can be quite complex, it is important that members and fund trustees seek professional advice before making decisions on the payment of benefits.