Transition-to-retirement pension: Can I work full-time and take a TRIP?

Question: Your site says: “By starting a TRIP, you don’t have to retire to withdraw your super benefits. You can work part-time or full-time or even casually.” But on the TRIP form I have from my super fund it says I have to be permanently retired or be working part time. Which is correct? I can’t see any reference on the ATO site to a need to be working part time. So can I continue working full-time and still do TRIPs?

Answer: We are an information site rather than advisory site so I have to be mindful that I don’t provide you with specific advice. The short answer to your question however is ‘yes’, an individual can work full-time while taking a TRIP.

A super fund doesn’t have to offer TRIPs, and your super fund may not offer this type of income stream. Based on the information contained in your question, I suspect that the form you have is for a fund member considering retirement, rather than considering a TRIP. I suggest you confirm with your super fund whether they offer TRIPs, and whether there is a special form for this type of income stream.

Background: A TRIP enables Australians aged 55 or over to access their super in the form of a pension ( income streams) without retiring or satisfying another condition of release. Although some individuals use TRIPs for a gradual transition into retirement, the majority of TRIPpers use the strategy for boosting super savings and reducing tax, while working full time. Until the concessional contributions cap was halved to $25,000 for over-50s, the popular ‘salary sacrificing and TRIP’ strategy was generally used (and to a lesser extent is still used) by those in full-time employment and/or those on higher incomes. I explain how a TRIP works in more detail in the following SuperGuide articles:

• TRIPs: 10 interesting facts about transition-to-retirement pensions
• Transition-to-retirement pension: How does a TRIP work?

Note: The legislative backing for the rules applicable to TRIPs can be found in sub-regulation 6.01 of the Superannuation Industry (Supervision) (SIS) Regulations 1994, Item 110 of the SIS Regulations

A condition of release is satisfied for the purposes of starting a TRIP if an individual has reached preservation age (currently age 55). The condition of release makes no mention of whether an individual is working full-time or part-time. The regulations do stipulate the rules applicable to a TRIP, such as no more than 10% of the account balance withdrawn each year, and that the income stream must be non-commutable (that is, not able to be converted to a lump sum).

Note: If you’re aged 55 or over and retired, then you can withdraw your super benefits without the need to start a TRIP. You can start a regular account-based pension, or you can take a lump sum. Reaching preservation age and retiring is another condition of release available (and one of the most popular) for accessing super benefits.