Accessing super early: 14 legal ways to withdraw your super benefits

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 our 2 million website visitors annually (including visitors from around the world) asking when, and how, you can claim your Australian super benefits.

Withdrawing 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: This article provides an excellent overview and summary of the 14 ways you access your super. You can also use this article to access more than 50 articles (you can find the links contained within this article), answering different aspects of accessing super benefits early. This summary article, and the 50-plus related articles, are a product of the most popular questions asked by readers on the topic of accessing super early.

Why is ‘preservation age’ so important?

In most cases you cannot withdraw your superannuation until you reach your preservation age and retire, which is age 55 for those born before July 1960, and at least 56 years for those born after June 1960, and up to age 60, depending on date of birth. For a fund member born after June 1964, preservation age is 60 years (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?

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 withdraw your super if you satisfy a condition of release. Satisfying a condition of release means your preserved benefits can be accessed immediately (or as soon as practicable), provided the rules of your fund also let you withdraw your super.

Important: Although the broader super rules may permit early access, some super funds don’t permit 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. Temporary resident leaves Australia permanently
11. Permanent disability or permanent incapacity
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 AND retire. Preservation age ranges from age 55 to 60 years, depending on date of birth – refer table earlier in this article. 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 (or 56) 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 reached preservation age

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 articles explain how this exception works:

• Does changing to part-time at 60 years, count as ‘retiring’?
• Accessing super at 60 due to hardship, rather than retirement

3. Reach the age of 65

As soon as you reach the age of 65, you can withdraw your entire superannuation benefit (if you wish), even when you haven’t retired from the workforce, but you don’t have to. 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?

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

You can access a portion of your benefit each year by starting a super pension without retiring, provided that you’ve reached your preservation age (55 years if born before July 1960, or from 56 to 60 years, if born after June 1960) and you withdraw no more than 10 per cent of your account balance as a pension payment/s each year. In nearly all cases, the TRIP is non-commutable, that is, 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:

• Less tax, more super? A transition-to-retirement pension may be the answer
• 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?

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 may hold, but only if they were super fund members before 1 July 1999, and even then, they may not hold such benefits. 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 reasonable family expenses. 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.

b. 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:

• Can I access super early due to ‘severe financial hardship’?
• Accessing super early: Unemployed and in financial hardship
• Accessing super early because of money troubles
• Accessing super for a home loan deposit?
• Accessing super early: Can I withdraw my super to pay off my debts?
• No early super access for business debts or tax bills
• Can I use my super to pay bills?
• I claimed my super due to hardship. Why do I have to pay tax?

8. Compassionate grounds

Before you retire, your super fund can release, 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:

• Accessing super early on ‘compassionate grounds’
• I’m losing my home. Can I access my super early?
• Super for beginners, part 10: Can I access my super early to reduce my mortgage?
• Accessing super early: Can I withdraw super to pay overdue rent?
• Accessing super early: Serious illness or surgery
• Can I access my super because of my disability?
• Accessing super to be a carer and work part-time

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 24 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:

• Accessing super early: Terminal illness
• Accessing super early: Terminally ill receive tax break

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. Temporary 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:

• Accessing super early: Temporary resident of Australia
• Accessing super early: Permanent departure from Australia (6 Q&As)
• Accessing super early: Living overseas and reached preservation age
• KiwiSaver: Only one super fund accepts super transfers from NZ to Australia

11. Permanent disability or permanent incapacity

If you suffer chronic illness or serious disability you may be able to claim on an total and permanent disability insurance policy that may be attached to your super account. Check with your super fund for the terms and conditions of any insurance policy. Under the super rules, you can also access your super benefits early if you’re suffering ‘permanent incapacity’, which has a special definition. 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 reasonably qualified by education, training or experience. For more information on permanent disability or permanent incapacity see the following SuperGuide articles:

• Can I access my super early because of my disability?
• Accessing super: How long does it take for TPD insurance to be paid out?

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. For more information, see SuperGuide articles:

• Income protection insurance: Can I claim against my super’s policy due to work injury?
• Does shift work count for SG entitlements and income protection cover?

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:

• 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?
• Pension earnings remain tax-free after death

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.