Individuals with a terminal medical condition are able to access their super lump sum payments tax-free, regardless of age.
A super fund can release super benefits to a member if they have a terminal medical condition. According to the legislation, a terminal medical condition exists if two registered medical practitioners have certified jointly or separately, that the member suffers from an illness, or has incurred an injury that is likely to result in the member’s death within 12 months of the date of certification. For each of these certificates, the certification period must not have ended. Further, at least one of the registered medical practitioners must be a specialist practicing in an area related to the illness or injury.
Note: Early access due to terminal illness is available from any super fund, including a self-managed super fund.
If a member of a SMSF is facing such an unfortunate circumstance then the appropriate certification must be produced before the super monies can be released. The ATO recommends that before making such a payment from a SMSF, that you check if your fund member has any other super accounts in existence and arrange the transfer of those benefits into the member’s account before making a payment under this
Note: Alternatively, you can apply to the Australian Prudential Regulation Authority (APRA) to access your super on
See also
- Accessing super early: Terminal illness
- Accessing super early on compassionate grounds
- Accessing super early: 14 popular Q and As
- Accessing super early: Serious illness or surgery
- Accessing super early: Is it possible to withdraw super to pay overdue rent?
I have type 1 diabetes ,am living in crisis accomadation and have suffered recent family breakdown. My health is deteriorating at a reasonable but irreversable rate and am unable to continue my 33 year career as an interstate truckdriver. One solution is to withdraw funds early, buy cheap land in tasmania and build my own livable quaters. Somwhere to die i call it. Also i would to have something to hand down somthing to my 13 year old son.
Hi Rodney
Thanks for your email and sorry to read about your situation.
I will provide a fuller response in the March 2011 newsletter (no names used) but briefly you may want to chat to your super fund about your entitlements such as total and permanent disability insurance cover that you may have, and whether your health situation qualifies you for claiming TPD cover.
Also, the rules for ‘severe financial hardship’ require you to be on Centrelink benefits.
Accessing super due to compassionate grounds can cover costs of medical treatment and transport.
Note that a super fund won’t permit access on grounds of severe financial hardship if the reason is buy a house, but they generally will release money to pay everyday rent and living expenses.
The regulator (APRA) won’t release money on compassionate grounds for the purposes of an individual making a move to Tasmania but they can for medical reasons. I cannot comment on what APRA is going to do (because they decide on all set of facts) but I suspect living in crisis accommodation is not good for your health and finding more suitable accommodation could fall into ‘modifying’ accommodation. Ultimately, APRA makes the decision on compassionate grounds (subject to your super fund allowing early access).
The term ‘terminal illness’ has a special meaning for the purposes of accessing super early on a tax-free basis.
I explain all of these rules in various articles on the http://www.superguide.com.au website.
Hope this helps.
Regards
Trish