Accessing super early: 14 legal reasons to cash your super

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

  1. Retirement
  2. Aged from 60 years to 64 years and cease employment
  3. Reach the age of 65
  4. Decision to start a transition-to-retirement pension (TRIP)
  5. Preserved amount is less than $200
  6. Cease employment and have certain pre-1999 super benefits
  7. Severe financial hardship
  8. Compassionate grounds
  9. Terminal medical condition
  10. Non-resident leaves Australia permanently
  11. Permanent disability
  12. Temporary incapacity
  13. Death
  14. Decision to take your benefit as a lifetime pension or annuity

1. Retirement

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:

2. Aged from 60 years to 64 years, and cease employment

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’?

3. Reach 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 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:

5. 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.

6. 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 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

7. 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 (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:

8. 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 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:

9. Terminal medical condition

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).

10. Non-resident leaves 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, 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:

11. 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.

12. 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.

13. 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:

14. 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 only available in older public sector super funds.

© Copyright Trish Power 2009-2014

Copyright for this article belongs to Trish Power, and cannot be reproduced without express and specific consent.

IMPORTANT: SuperGuide does not provide financial advice. SuperGuide does not answer all questions posted in the comments section. SuperGuide may use your question or comment, or use questions from several readers, as the basis for an article topic that we publish on the SuperGuide website. We will not disclose names or personal information in these articles. Comments provided by readers that may include information relating to tax, superannuation or other rules cannot be relied upon as advice. SuperGuide does not verify the information provided within comments from readers. Readers need to seek independent advice about their personal circumstances.

Comments

  1. There seem to be alot of rules and regulations about early release, provided you have been getting income support for at least “such n such” number of weeks.

    However, as a New Zealander, who is only a resident here. I am not applicable for such benefits, and so working is my ONLY source of income. If I hurt or injure myself, and I cant work.. I cant get any assistance from the government here. Cause they don’t see me as a Permanent Resident, just a Resident… and there is a huge difference.

    I work full time, pay the same as an Australian Citizen via the ATO, Super is the same when being contributed into my account.. however, early release for New Zealanders doesnt allow equal qualification.

    How can I be on Centre Link for however long, If Im not even allowed to be considered to have it? Therefore, afew of these “early release conditions”, can not apply to me. Seems very bias!

    New Zealanders make up a huge percentage of the Australian Work force.. I know, Ive been here for 10 years+ and its really not fair. Kiwis earn the same, pay the ATO the same, pay the same rent, mortages, etc… but if we ever needed assistance from the Australian Government, its a lot of red tape to go through, and there is still no guarantee that any help will be given.

    Anyways.. Trans-Tasman agreement or not. I think that these Superannuation Products should be reviewed for New Zealanders. You cant make us work like an Citizen and then make half the policies work for us.

  2. hi i was wondering if i can get my super to get my roof fixed i own my house ive been on benifits for a year and now foster my grandchild
    the roof leeks i am unable to get a loan or morgage i have back problems and had a major heart attack last year do you think i have aney chance

  3. Im leaving Australia to live in indonesia, how difficult will it be for me to access the funds inn my super and does this mean I lose my citizenship?

  4. Hi I’ve been unemployed for 12 months and I need all my teeth pulled out and false one’s put in new ones and I have four kids and me and my partner r living at our parents house cause I can’t find work can I get my super out and use that money to fix my teeth get a car and a house I don’t get centrelink

  5. HI,

    I retired and cashed in some of my supper and later went back to work. what is the penalty for going back to work

  6. Vic Dunstan says:

    Hi Trish,
    I appreciate your articles. I am a 47 (born 1966) yo caucasion male. I have three Superannuation funds. Two State funds and One Federal Fund. The total amount of the funds are around $200,000. Am I able to start a self managed fund, withdraw the Super from my current accounts and purchase a property and rent it out?

    I would appreciate your response. Kind regards,

    Vic

  7. I am applying for a Australia Pension. I have an allocated pension with approx $95,000 from which I draw $1600 per month. Can I pass this entire amount to my wife to enable me to get a pension, or just reduce the amount the amount I withdraw each month to the minimum. Is an allocated pension treated differently to money in the bank?

  8. hi ! would you be able to tell me if i can access ,say 10% of my super due to fininicial hardship i am 55 years of age and if i am able to how do i go about accessing the funds available . thank
    ks for any feedback
    Ron

  9. Kristina says:

    Just wondering whether it is possible to access super to start our own small business? My husband has been unemployed off and on ( mostly off) for the last 12 months and due to the area where we live, employment is difficult to come by. I work full time and according to Centrelink, I earn too much for my husband to be elligible for unemployment or else he only gets about $14 per f/n. However, we are still struggling to make ends meet. There is an opportunity to start our own small business and we have every reason to believe that the business will succeed however we are in need of capital. Is accessing super possible?

    • hi Kristina

      how did you go with this i am in the same position looking to use my super and my wifes super to start up a business

      your help and experience would be greatly appreciated

  10. Natalie Harris says:

    Dear Trish,
    I’ve been working in the mines for the past 2 years and have an ok looking super
    I’m sorry to say this about myself but I’ve always been pretty bad with money and I stopped paying my car payments about 6 months when I went through some extreme changes in my life.
    I meant to catch back up but somehow just got lost in the big hole I had dug myself.
    how ever I recently just lost my job, and two days later received a repo guy turn up for my car.
    So I now have no income and my means for transport are about to disappear
    is there any way I could possibly access some of my super to pay what’s owed and to tie me over with bills till I get anther job ?

    • (Moderated) I can tell you accessing your super isn’t going to happen because this falls outside every reason to access your super especially on compassionate grounds. the best thing for you is to let the repo guys take your car you apply for other jobs, put your head down when you get another job and save, save, save. Get good debt next time, by buying a house or land.

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