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Accessing super early: 12 legal reasons to cash your super

March 17, 2013
By 78 Comments

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.

We have received many emails from readers asking when, and how, you can claim your super benefits, including whether you can apply for early release of super.

Claiming superannuation benefits means you must satisfy certain super rules.

In brief, there are 12 ways to unlock your super early.

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

  1. Retirement
  2. Preserved amount of super benefits is less than $200
  3. Reaching the age of 65
  4. Decision to start a transition-to-retirement pension (TRIP)
  5. Severe financial hardship
  6. Compassionate grounds
  7. Non-resident leaving Australia permanently
  8. Permanent disability
  9. Temporary incapacity
  10. Death
  11. Decision to take your benefit as lifetime pension or annuity
  12. Cease employment and have certain pre-1999 super benefits

1. Retirement

Retirement is the most common condition of release. The following SuperGuide articles help explain what ‘retirement’ means when accessing super benefits:

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’?

2. Preserved amount of super benefits is less than $200

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.

3. Reaching the age of 65

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:

4. Decision to start a transition-to-retirement pension (TRIP)

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:

5. Severe financial hardship

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:

6. Compassionate grounds

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:

7. Non-resident leaving Australia permanently

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:

8. Permanent disability

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.

9. Temporary incapacity

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.

10. Death

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:

11. Decision to take your benefit as lifetime pension or annuity

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.

12. Cease employment and have certain pre-1999 super benefits

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

Accessing super early: 12 legal reasons to cash your super Super Guide

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Accessing super, Accessing super early, How super works, Retirement planning

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Comments

  1. Allan says:
    June 22, 2012 at 6:04 am

    i will turn 55 in April next year. I currently have $ 300,000 sitting in my superannuation account ( 100 per cent cash ) my question is two fold :
    1) at 55 can I withdraw a nominal amount ( say $ 10,000 ) tax fee ? I intend working till age 60
    2) with Swan reducing voluntary contributions to $ 25,000 but still leaving a generous package for politicians , can I contribute to my wife’s superannuation an thus avoid penalties for exceeding the threshold ?

    I await your advices

    Reply
  2. Tina says:
    June 5, 2012 at 9:33 am

    Hi Trish,
    My husband is 65 and retired last year while I am still working (I am 62). Before retiring we started Transision to Retirement Pension accounts and withdraw only the minimum requirement per year. Since August last year my husband has been receiving a part pension but has now started working part time and we have decided that the money that he can make working only a couple of days a week far outweighs the benefits of being on the pension. The money tied up in the TRIP accounts is less than $200,000 combined and we are growing increasing disillussioned with the accounts which seem to be costing more and more in fees and generally going backwards. Are we able to withdraw the money from these accounts and put the money into interest bearing bank accounts?

    Reply
  3. gordon says:
    June 3, 2012 at 3:38 pm

    I am male 60yrs old I am still working full time,
    I am married and my wife has retired she is age 64

    I would like to access my super.
    Because i feel it is just disappearing down a great big hole.
    how much can i get and can it be in a lump sum or is it in a monthly/weekly amounts
    your advice would be welcome
    thank you trish

    Reply
  4. carl leslie rieck says:
    June 2, 2012 at 8:53 pm

    hi trish i have got one simple question if my super is unrestricted non preserved can i access it now and still remain working if i leave over $2000 in the fund?

    Reply
  5. silvia says:
    May 30, 2012 at 7:02 pm

    i would like to find out if i can take money out of my superanuannuation to put as a deposit to buy a house

    Reply
  6. jerome says:
    May 30, 2012 at 6:38 am

    Hello, we are in so much debt it is not funny. Is it legal to open up a self managed super fund, then create a company that invests in loans as such and use the money from the super fund to go to the company and pay out my debts and pay it back like a personal loan over 4 years with say 5% interest – that way it is an investment for the super – i get my debts paid off – my super gets the money back plus 5% interest (instead of going through the banks and paying 15% interest)?

    Reply
  7. Mir says:
    May 24, 2012 at 5:11 pm

    Hi Trish Power,

    I am currently employed with a lot of anxiety and depression. i have been seeing the psychologist. due to have mortgage and other commitments i am sort of forced to work with a lot of pain going on at the moment. i didn’t know that i can access my super early if i am in special circumstances. i also have a sinus tract and a hernia which need surgery and cant afford to pay for them. All these health conditions are getting worst and if i dont take work off and take care of them they would become life threatening.

    Is there any chance for me to access my super early with all these conditions to pay for medical expenses and take time off work to recover from stress and depression?.

    Any help/advise would be greatly appreciated.

    Thank you

    Reply
  8. Micky says:
    May 10, 2012 at 3:18 pm

    Hi Trish,
    I’m thrilled to have found this website as it is the first place I’ve found that has started to simplify issues relating to super.
    I have 2 questions relating to our circumstances.
    Firstly I’m 52 and due to a chronic health condition I had to retire from the workforce in 2004 at the age of 45. Having been self employed most of my life I had only managed to put $22,000 into super, which is still in the same fund Colonial First State.
    I note at Item 10 above it mentions “Provided you take your super as a non-commutable lifetime pension or annuity, you can access your super at any age”. Given it is extremely unlikely I’ll be able to return to the workforce is this an option for me.
    Secondly, I have never been in receipt of Government Benefits or Disability Pensions as my husband has supported me since my retirement. This has meant we have been saving as hard as possible to raise the deposit to buy a home to give us some security for the future. Given my husband is now 55 and has $320,000 in the Defence Force MSBF and $40,000 in his current employers super fund we are wondering if there is any way to access approximately $60,000 from our combined funds to put towards a home.
    Any advice you can offer would be greatly appreciated as we have approached several financial advisers only to be told they want between $2500-4500 to devise a portfolio for us but in reality it seems that is money better saved towards our home deposit as we don’t want a portfolio and are not going to risk the savings we have on other investments at this stage.
    We have a number of friends in similar situations of similar age who do not own a home, yet can’t access super and struggle to get the deposit together. It seems the government presumes everyone our age has one.
    We are finding there is many aspects of super and tax regulations etc that seem to be quite unfair e.g. If we both worked for $70,000 p/a we’d pay at least $12,000 less tax p/a than when one person earning $140,000 p/a supports the whole family.
    Although we’d love to be contributing more of my husband’s wage to my super fund for tax purposes we can’t at this stage due to the need to have cash for the home deposit.
    Are we really in a Catch 22 situation or are we missing something here.

    Regards
    Micky

    Reply
  9. Carl says:
    May 5, 2012 at 3:05 pm

    Hello Trish, Thank you very much for listing this very useful information. I am very glad I found your site. I am sure this information will be helpful for many people.

    I have about $17,000 accumulated in my Australian Super fund, that I would like to access if possible. I was born in Australia, but I have been living in Japan for 18 years. I am a permanent resident of Japan, and I am paying into the Japanese pension system. When I return to Australia (once every 2 years for a 1-2 week holiday), I always enter Australia as a non-resident, temporarily entering Australia.

    Based on point 6 in the list above (and being a non-resident, who has left Australia permanently), it would seem that I am eligible to access my super funds. Based on my situation, do you think that I would be eligible to access my Super? If so, what steps might I need to take to access my Super funds? And who would I contact to start the process?

    Thanks again for the great information.
    Best regards,
    Carl

    Reply
  10. Irene says:
    May 4, 2012 at 2:43 am

    Hi Trisha

    I have accessed my super already as I thought that I was not wanting to work and retire.
    But I feel at a lost and feel that I need to work and also my husband has just injured his shoulders
    At work . I am just worried that if he doesn’t get better I might have to work. I am 56 and he is 57.
    And if I wait any longer to go back to the work force I might have difficulty getting a job at my age.

    Kindly advice.

    Regard
    Irene

    Reply
  11. Jordan says:
    May 2, 2012 at 5:37 am

    Hi Ino ill prob just say follow the rules least you can do is apply i just want to know if iv
    I’ve got much luck I’ve been unemployed for 4 months an due to just surviving i haven’t been able to keep up with my $5000 personal loan repayments which i have to pay back 7 grand i bought a car last year when i got the loan for $3900 but nw it only worth $1600. Im now close to $2000 in debt in my bank account an an my sper payments have begun to get hefty penalties i have 10000 in a super account frm defence force . Do i have any chance in accessing my super to pay my loan off so i can start to get back on my feet ???

    Reply
  12. Tony says:
    April 29, 2012 at 4:28 pm

    Hi, I am turning 55 this year and don,t have a lot of super, not enought to keep me going. Can I get my super at 55 and still get work. I am unemployed right now. Even if I keep working I stiil wont have enough to retire on so I might as well get it if I can. Is this possible. Regards tony.

    Reply
  13. Mike says:
    April 22, 2012 at 9:13 am

    Hi Trish,

    I was just recently made redundant and am not really looking forward to going back to work for someone else. I was thinking about starting my own business and was wondering if I can invest my super into a business?

    Thanks Mike

    Reply
  14. Sharry says:
    April 19, 2012 at 4:12 pm

    Hi Trish,
    I was born in 1955 and have been a recipient of DSP for several years.
    I had surgery for an arthritic foot last year and am on the waiting list for a hand operation (dominant hand) – due any day!
    I have not been able to work full-time for 10 years because of my disability and have not worked as an employee since July 2010. I work approximately 1 – 2 hours per week as a contractor and for this position, I had to take out my own ABN (but I’m not classified as self-employed). Referrals for my assignments are sent to me to do when able. (They are minimal as you will have deduced).
    I spend an inordianate amount of time on my budget, trying to meet the rent etc, living on the DSP and an average payment of $40.00 per week for the assignments.
    Could you please advise whether I am able to withdraw my superannuations (Hesta and Health Super)which total $11,000 to $12,000.
    I didnt know of the following clause _ relating to the 12 reasons one may withdraw super.
    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.
    Many thanks in advance,
    Sharry.

    Reply
  15. Damien says:
    December 4, 2011 at 9:14 pm

    Hi Trish, I’m lucky I found your site. I hope this question doesn’t inconvenience you too much. I have just started to get my super into order. I’m 30. I had 10 differnt funds from many casual jobs. Basicly this ment that I lost losts of money over the years in fees becasue it was spread out in so many funds. I didn’t pay much attention to super when i started work as a teenager. Now I have about $1000 only left between two funds, AUS fund and ISPF. I am about to leave Australia and work overseas for many years. I have previously worked overseas for 3years before. I don’t want this $1000 to disappear. I have been unemployed for the last 2 years in Australia. I believe that becasue I have been unemployed I should be able to claim ‘extreme financial hardship’ and get that $1000. Basicly I want the money now because i need it and if I don’t get it I think it will be eaten in fees. Can you please advise me how best to get this money. Thanks, Damien

    Reply
  16. Kathy says:
    November 24, 2011 at 10:14 am

    Hi, My husband has had 3 operations on his shoulders (2 on 1 shoulder and 1 on the other) The specialist has said he cannot work in the field that he has done for the past 24 years, (Earthmoving) we have been self employed for that time. He tried to return to work in August but his shoulder went again hence the 3rd operation. He has been on Centrelink for the whole year. Also, in January I broke my leg and have had many complications with it, I have now found out through an mri that I have to have it operated on. I have also been on Centrelink since January, I am an aged care nurse and the doctors think i wont be able to work again in my field also. All our savings have dissapeared and we are living fortnight to fortnight waiting for the centrelink money to come through. We have a big car payment which takes up 1/2 of newstart. Is there any chance at all that we can access some of our superannuation to just help us a little. My husband is 48 and I am 47. Thank you

    Reply
  17. Noni says:
    November 17, 2011 at 5:16 pm

    Hi,

    I am employed however I have huge credit card debt that I can’t get out of due to only being able to make minimum monthly payment. I wanted to access my super so I can pay off this debt however found out that I have to be unemployed for 6 mnths, I am absolutely gobsmacked that there is no way to access this money. Through Human Services Extreme Financial Harship your bank needs to be about to sell your home. I can’t understand why you can’t get help prior to it getting to the point where we lose our house. I get that this money is preserved for our future…But in the meantime, we get to lose everything we have worked for. There has got to be some sort of help out there. Any ideas???

    Reply
    • Trish Power says:
      December 6, 2011 at 2:28 pm

      Hi Noni
      Thanks for your comment. Yes, the rules are fairly strict when it comes to accessing super and if you have tried all the options in relation to the super rules, then unless you are aged 55 or over, there is really not much option in accessing super. If you’red 55 or over, you can start a transition-to-retirement pension (if your super fund offers this option) and access up to 10% of your super each year.

      What I can do is point you in the direction of a financial counsellor. You can access free financial counselling to help you manage your day-to-day finances. The Australian Securities and Investments Commission has a list of the main services across the country. Click on the link to access the list: http://www.moneysmart.gov.au/managing-my-money/managing-debts/financial-counselling:
      I hope things turn out okay for you.
      Regards
      Trish

      Reply
    • sally says:
      May 27, 2012 at 1:27 pm

      hi I am 54 this year already bank rupt since splitting from my husband I keeping falling behind in my payments to them as my income is less then what I pay out weekly I would like to draw on super just pay that bill out which is about 16.000.00 there must be away to this it would save me around $400 per f/n which is the difference between being able to buy food and paying bills on time

      Reply
  18. matt says:
    October 3, 2011 at 5:59 pm

    hi trish. My exs mother went guranator for us on a house we bought (with her own house) and she is still gurantor on that house which i would like to get her out of. Im wondering if i can get access to my super to pay her out. she is elderly and i hate having her worry about somehting that she is no longer obligated with.

    Reply
  19. Gilda says:
    July 22, 2011 at 12:26 pm

    I have only a small amount of accumulated superannuation – less than $5000 – but would like to access it to meet rising expenses associated with continuing to help support my adult daughter and her young child who live with me. I am not 60 until next April. I do not receive any Centrelink payment and have been living on rapidly dwindling savings for years. Realistically, it is unlikely that I will ever be employed again as my daughter is disabled and cannot yet live independently and needs to be with me so that I can assist with caring for her child. I doubt that her disability would yet be deemed long term enough for me to qualify for a Carer’s payment etc as it is still not fully diagnosed and thus its course is unpredictable. However, not being psychic, I doubt that I could actually guarantee that I will never work again. I may well be forced to (or at least try to claim a job seeker allowance) given the financial situation although my job prospects would be dubious. How “cast iron” does my statement of now being retired have to be? I consider myself to be, right now, but situations change. Would I be better simply to sit it out until age 60? The sum involved may seem paltry but . . . .

    Reply
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