Q: I turned 60 this year and I have been sick since late last year, so I can’t get back to work and need to retire. I am wondering if you can tell me what kind of tax I have to pay if I take my super payment. I haven’t been to work since the start of December 2011. I didn’t tell them I was retired because I kept hoping I’d soon be better, but I seem to be rather getting worse so just wondering if you can tell me my rights.
A: I’m sorry that you are not well. I have broken up my response into three parts.
- If an individual retires on or after the age of 60, then any super benefits received from a
- You mention that you have been unwell and your illness has meant that you are unable to work. Before taking the decision to retire, an individual in such a position may want to check whether their super fund account also pays premiums for disability insurance cover, and what circumstances such insurance is payable. In such circumstances, it is worth an individual chatting to their super fund to check entitlements because any disability payout is in addition to your super benefits.
- Under normal circumstances (that is, where a person chooses to retire rather than forced to retire due to ill-health), an individual aged 60 or over, is taken to have retired if an employment arrangement ends, and the trustee of the super fund is satisfied that the individual intends never again to become gainfully employed, either on a full-time or part-time basis. For a trustee to be satisfied, the super fund generally requires a fund member to complete a retirement declaration.
If an individual is aged 65 or over, he or she can automatically access preserved super benefits without proving retirement or another
Hello Trish, What a magnificent and helpful site you have? Through it I discovered the rule about the definition of retirement between 60 and 65.
I have a question, which I hope you can answer, which relates to this rule.
I am 60 and need to access my super early to partly pay for construction of a granny flat to accommodate a family member, who has a mental illness. I was told by my fund that I was considered to be retired as I have been on a DSP since 2005 and have not been employed since then. A short time ago I started a short term, part time contract position. I applied for early release of funds after I commenced, and the application was refused due to my being employed, i.e. not retired. I did not know that ‘retirement’ could be revoked
According to the SIS 1994 Act, I can prove retirement if I resign from my position and indicate that I don’t intend to work again. I have resigned and intend to make a new application to my fund for early release.
However another superannuation advice website states that, ‘if you have two positions, you only need to resign from one. You can still make contributions and can still get full access to all your super’. Is this true?
If this is the case, can I at some point in the future be legally re-employed by my most recent employer or any other employer, should the need arise?
I have investigated the APRA compassionate grounds for release of benefits, but this might be problematic because the unstable nature of the relative’s illness has led to a change of mind on their part- at present the relative does not want to live there, but may well decide to do so in the future.At present the relative is uncontactable. Despite that fact that the sole reason for building the granny flat has been to accommodate the relative, proving this may be difficult.
Thank you for your assistance.
Hi Helen
Thanks for your email, and kind feedback on our website.
If a benefit is considered unrestricted non-preserved, then an individual can access this benefit any time. Check with super fund to see if your benefit is already considered unrestricted non-preserved benefit, due to your previous cessation of employment. It does seem strange that you were knocked back but since I don’t have all of the facts and I’m not permitted to give advice, it is best to pursue it with your super fund.
If not successful due to previous event, then an individual who has turned 60 who then terminates employment will be considered to be ‘retired’ – your super fund should be able to assist.
I have included a background article for your information:
http://www.superguide.com.au/accessing-superannuation/retirement-unlocks-your-super
Regards
Trish