Many Australians are facing hard times, especially with structural change transforming our economy. The harsh reality is that mortgage repayments and everyday living expenses continue even when you when suffer redundancy, illness or other forms of misfortune.
We receive hundreds of emails from readers and casual visitors (including visitors from around the world) asking when, and how, you can claim your Australian super benefits.
Claiming superannuation benefits means you must satisfy certain super rules. In simple terms, there are 14 ways to unlock your super early (or for your family to unlock your super if you die), which are listed later in the article.
Note: In related articles (you can find the links contained within this article), we answer 36 of the most popular questions asked by readers over the past few years about accessing super early.
In most cases you cannot withdraw your superannuation until you reach your preservation age, which is at least 55 years 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 my 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: Adapted from Superannuation Industry (Supervision) Regulations 1994, sub-Regulation 6.01
When can I access my superannuation benefits?
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 be accessed now, provided the rules of your fund also let you cash your super. Although the broader super rules may permit early access, some super funds don’t permit early access to super benefits where an individual has applied on severe financial hardship grounds or compassionate grounds. You will need to check with your super fund whether your fund allows early access on these grounds.
The Conditions of Release are
- Aged from 60 years to 64 years and cease employment
- Reach the age of 65
- Decision to start a transition-to-retirement pension (TRIP)
- Preserved amount is less than $200
- Cease employment and have certain pre-1999 super benefits
- Severe financial hardship
- Compassionate grounds
- Terminal medical condition
- Non-resident leaves Australia permanently
- Permanent disability
- Temporary incapacity
- Decision to take your benefit as a lifetime pension or annuity
Retirement is the most common condition of release. You can retire when you have reached your preservation age (currently age 55) and retire. Your super fund will usually require a retirement declaration verifying that you have retired. The following SuperGuide articles help explain what ‘retirement’ means when accessing super benefits, and also what happens if you decide to return to work:
- 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
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, they can be considered ‘retired’. 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 (Reach the age of 65). The following SuperGuide article explains how this exception works: Does changing to part-time at 60 years, count as ‘retiring’?
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 a portion of your benefit each year by starting 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 as a pension payment/s 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:
- Super 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 what form do I fill in?
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.
If you’ve been a member of a super fund since before 1 July 1999, you can cash your ‘restricted non-preserved benefit’ (certain benefits accumulated up to 30 June 1999) 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
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 (from age 55 to 60, depending on date of birth), 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
- Can I access 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 pay for funeral or medical expenses, or palliative care. If you, or one of your dependants, is 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 suffer a terminal medical condition as defined by the super laws, you will be able to access your super benefits early. In addition, you won’t have to pay any benefits tax on those benefits. ‘Terminal medical condition’ has a specific definition, as defined in the super laws. A “terminal medical condition exists in relation to a person at a particular person if the following circumstances exist:
(a) Two registered medical practitioners have certified jointly or separately, that the person suffers from an illness, or has incurred an injury, that is likely to result in the death of the person within a period (the ‘certification period’) that ends not more than 12 months after the date of the certification;
(b) At least one of the registered medical practitioners is a specialist practising in an area related to the illness or injury suffered by the person
(c) For each of the certificates, the certification period has not ended
For more detail on this condition of release, see the following SuperGuide articles:
If you’re suffering a serious illness, or a family member is suffering a serious illness, also check out condition of release no 8 (compassionate grounds).
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, although New Zealand citizens may be able to transfer Australian super benefits to a KiwiSaver account. 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
- One-way traffic! Moving super from NZ to Australia not happening
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?
- Confirmed! 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 only available in older public sector super funds.
Copyright for this article belongs to Trish Power, and cannot be reproduced without express and specific consent.