Many Australians are facing hard times but mortgage repayments and everyday living expenses continue even when you lose your job, or suffer illness or other misfortune.
In most cases you cannot withdraw your superannuation until you reach your ‘preservation’ age, which is at least 55 and can be up to the age of 60 years depending on your date of birth. For anyone born before 1 July 1960, the preservation age is 55 and steadily increases to 60 years of age for those born on or after 1 July 1964 (see table below).
‘Preservation’ in this context simply means locked away, although some Australians who have had superannuation accounts prior to 1999 may also have some ‘unrestricted non-preserved’ benefits which they can access at any time.
Note: ‘Preserved’ benefits do not mean that your superannuation benefits are a fixed, guaranteed amount; just that they are locked away until you reach your preservation age and retire, or, satisfy another condition of release.
What is your preservation age?
|Date of birth||Your preservation age|
|Before 1 July 1960||55|
|From 1 July 1960 until 30 June 1961||56|
|From 1 July 1961 until 30 June 1962||57|
|From 1 July 1962 until 30 June 1963||58|
|From 1 July 1963 until 30 June 1964||59|
|On or after 1 July 1964||60|
Source: Australian Taxation Office superannuation website (www.ato.gov.au/super)
When you can access your superannuation
In most cases, you can only access your super if you satisfy a condition of release. Satisfying a condition of release means your preserved benefits can become unrestricted — that means you can access your super now provided the rules of your fund also let you cash your super.
The Conditions of Release are
- Preserved amount of super benefits is less than $200
- Reaching the age of 65
- Decision to start a transition-to-retirement pension (TRIP)
- Severe financial hardship
- Compassionate grounds
- Non-resident leaving Australia permanently
- Permanent disability
- Temporary incapacity
- Decision to take your benefit as lifetime pension or annuity
- Cease employment and have certain pre-1999 super benefits
Retirement is the most common condition of release. The following SuperGuide articles help explain what ‘retirement’ means when accessing super benefits:
- If I retire before 60, when can I access my super?
- Accessing super: Turning 55 is not enough
- Super for beginners, Part 9: If I retire and take my super, can I return to work?
- If I ‘retire’, how soon can I return to work?
- Accessing super early: Living overseas and over the age of 55
Note: There is a special ‘retirement’ rule for individuals aged 60 or over who cease an employment arrangement. A relatively unknown sub-category of the ‘retirement’ condition of release is where a person is aged 60 or over but under the age of 65 and they cease an employment arrangement. In these circumstances, the person can be considered ‘retired’ for the purposes of accessing super. If an employment arrangement continues however, then turning 60 on its own is not considered a condition of release. See also condition of release no 3 (Reaching the age of 65). The following SuperGuide article explains how this exception works: Does changing to part-time at 60 count as ‘retiring’?
You can access your preserved benefit if you leave a job where your employer was contributing to your fund on your behalf, and the preserved superannuation benefit is less than $200.
As soon as you reach the age of 65, you can access your entire superannuation benefit, even when you haven’t retired from the workforce. The following SuperGuide articles help explain why you can access your super benefits when you reach the age of 65, even if you choose to continue working:
- What are the super and retirement rules for over-65s?
- I’m 67. Can I access my super and continue working?
- Super for beginners, part 24: Do I have to withdraw my super when I turn 65?
You can access your super as a non-commutable income stream/pension without retiring provided that you’re aged 55 or over and you withdraw no more than 10 per cent of your account balance each year. Non-commutable means that you cannot convert your pension account to a lump sum payment. The following SuperGuide articles help explain how a transition-to-retirement pension (TRIP) works:
- Pensions: Starting a TRIP takes planning
- TRIPs: 10 interesting facts about transition-to-retirement pensions
- Transition-to-retirement pension (case studies): How does a TRIP work?
- Transition-to-retirement pension: Can I work full-time and take a TRIP?
If you fall on hard times, you may be able to get some of your superannuation back if you satisfy the special conditions that constitute the government’s view of ‘severe financial hardship’. The trustee of your fund may give you access to a portion of your benefit, subject to certain conditions. In general terms, here are the rules:
a. You have been receiving Commonwealth Government income support, for example, unemployment benefits, for at least 26 weeks, continuously, and the trustee of your super fund is satisfied that you can’t meet immediate family expenses.
b. Any payment is for the purposes of meeting everyday living expenses and can be one payment of no more than $10,000 (including tax) in any 12-month period.
c. If you’ve reached your preservation age, you may be able to receive your entire superannuation benefit provided that you’ve been in receipt of government income support for at least 39 weeks.
The following SuperGuide articles help explain some of the scenarios that may fall within the special condition of ‘severe financial hardship’, and also circumstances that fall outside the rules:
- Accessing super early: Unemployed and in financial hardship
- Can you access super to pay your mortgage if you’re unemployed?
- Accessing super early: Can I withdraw my super to pay off my debts?
- Accessing super early: Not for business debts
- No early super access for business debts or tax bills
- Accessing super early due to severe financial hardship
- Can I use my super to pay bills?
Your fund can release, before you retire, part or all of your preserved benefits if you’re suffering a life-threatening illness, or trying to prevent the bank selling your home because of overdue loan repayments. You can also apply for early release of superannuation on compassionate grounds to fund funeral or medical expenses, or palliative care.
If you or one of your dependants are severely disabled, you can apply to access your super if this disability requires your home or car to be modified due to the disability. First, contact your fund to find out whether it permits early release of any preserved benefits.
If your fund does permit this type of early access, you can then apply to the Department of Human Services (www.humanservices.gov.au) for early release of your preserved benefit on compassionate grounds. The following SuperGuide articles help explain some of the scenarios that may fall within the special condition of ‘compassionate grounds’, and also circumstances that fall outside the rules:
- Can I withdraw super if the bank is foreclosing on my mortgage?
- Super for beginners, part 10: Can I use my super to reduce my mortgage?
- I’m losing my home. Can I access my super?
- Accessing super early: Can I withdraw super to pay overdue rent?
If you’re a non-resident of Australia, you can access your Australian superannuation benefit when you permanently leave Australia. You’re a non-resident if you enter Australia on an eligible temporary resident visa. Note that, under this specific condition, if you are an Australian and New Zealand citizen, or a permanent resident of Australia, or you hold a retirement visa, then you cannot access your super benefits when you leave Australia permanently. The following SuperGuide articles help explain who is eligible (and who is not eligible) to access super benefits when they depart Australia permanently:
- Accessing super early: Temporary resident of Australia
- Accessing super early: Permanent departure from Australia (6 Q&As)
- Accessing super early: Living overseas and over the age of 55
You can access your preserved super benefits if you become permanently incapacitated, that is, the trustee of your super fund is satisfied that, due to ill health, you’re unlikely ever to be able to work in a job for which you’re qualified by education, training or experience.
Your fund may automatically provide income protection insurance, or you may be able to apply for such insurance via your superannuation fund. If you suffer prolonged illness or disability you can access this insurance cover and receive a regular income, usually for up to two years.
If you die, your superannuation fund pays your death benefit to your estate, or to your spouse or other dependants. The following SuperGuide articles help explain what happens to your super benefits if you die:
- Estate planning: Dear Dad, Tax for everything
- Estate planning: Beware the dastardly death tax
- How can a SMSF live forever?
- SMSF: If I die young, will my wife pay super tax on the life insurance payout?
- Good news! Pension earnings remain tax-free after death
Provided you take your super as a non-commutable lifetime pension or annuity, you can access your super at any age. A non-commutable lifetime pension or annuity is one that you receive for your lifetime and which you can’t convert to a lump sum amount. Typically, this lifetime pension option is available in older public sector super funds.
If you’ve been a member of a super fund since before 1 July 1999, you can cash your ‘restricted benefit’ only when you cease employment with your employer. A restricted benefit is a special category of super benefit that Australians who were super fund members before 1 July 1999 may hold. The following SuperGuide article explains how this exception works: Unrestricted access to super, sometimes