Q: I’m an expat Australian, and I have been living in Europe for quite a few years. I am 57 and I want to access my superannuation to buy a property. Is that possible? I have no idea if I will retire back in Australia or stay here, but my view is that if I do retire back in Australia, I will sell the property to fund my retirement.
A: I have divided your question into 2 questions:
- Can I access my super at 57, if I am living overseas?
- Can I access my super to buy a property?
1. Can I access my super at 57, if I am living overseas?
The rules relating to when you can access your super benefits are fairly strict. You must satisfy a condition of release, and the most popular conditions of release are:
- Retirement after reaching preservation age (age 55 years for those born before July 1960, and at least 56 years for those born after June 1960, and at least 57 years for those born after June 1961, and at least 58 years for those born after June 1962, and at least 59 years for those born after June 1963 (see text below and SuperGuide articles Accessing super: What is my preservation age? and Accessing super: Preservation age moves to 59 years and Retirement Age Reckoner: Discover your preservation age and Age Pension age), OR
- Turning 65, which is considered a condition of release, and you don’t have to retire from the workforce (see SuperGuide article Super for beginners, part 24: Do I have to withdraw my super when I turn 65?), OR
- Taking a transition-to-retirement pension (TRIP), which is only available to individuals who have reached their preservation age, and only permits you to access up to 10% of the pension balance each year (see SuperGuide article TRIPs: 10 important facts about transition-to-retirement pensions, OR
- When you suffer ‘severe financial hardship’ or you can access your super early under ‘compassionate grounds’ (hardship provisions don’t generally apply to individuals living outside Australia) (see SuperGuide articles Can I access my super early due to financial hardship? and Accessing super early on ‘compassionate grounds’.
Specific rules regarding super access come into play when a fund member has reached their preservation age. Preservation age is at least 56 years (for those Australians born after June 1960) depending on birth date, although if a person was born before July 1960, he or she has a preservation age of 55 years. Reaching your preservation age means an individual can access super benefits provided they have also retired from the workforce.
If you were born before 1 July 1961, your preservation age is 55 years or 56 years. If you were born on or after 1 July 1961 and up to 30 June 1962, your preservation age is 57 years. For anyone born after June 1964, preservation age is 60 years (to identify your preservation age, see SuperGuide article Accessing super: Turning 55 (or 56 or 57 or 58 or 59) is not enough).
For an Australian living overseas, the rules are a little more complicated: you should check the rules with your Australian super fund, and the tax implications with your accountant or the ATO.
Generally, an Australian living overseas, like an Australian at home, who has reached their preservation age, can access his or her super benefits in Australia provided they provide documentary evidence to the fund that they have retired.
If an ex-pat is no longer a resident of Australia however, and reached preservation age, I believe that provided the individual supplies documentation of overseas residency and that they are not employed in Australia, then super funds will consider releasing the super benefits, although super funds will generally still require some form of ‘retirement’ declaration. Again, you need to do your own research on your particular circumstances.
Note: Tax is generally payable on super benefits withdrawn before the age of 60, and Australians living overseas will need to get tax advice on how the super benefits affect other taxable income (see also SuperGuide articles Retiring before the age of 60: the tax deal and Super tax tables: When UNDER 60 years of age).
You may also find the following SuperGuide articles helpful:
- Accessing super early: 14 legal ways to withdraw your super benefits
- Preservation age. I’m 58. Can I withdraw my super benefits?
- If I retire before 60, when can I access my super?
2. Can I access my super to buy a property?
The answer to whether you can access your super early for the express purpose of purchasing a property is generally ‘no’, although there is an exception in relation to self-managed super funds, in particular, commercial property. Although if you are permitted to withdraw your money from the super system, then what a person does with that money is up to them.
As I mentioned earlier in my response, the general answer is that you can only access your super if you satisfy a condition of release such as, retiring after your preservation age (55 if born before July 1960, and at least 56 years and up to 60 years, if born after June 1960), turning 65, or starting a TRIP, or suffering severe financial hardship (subject to strict rules).
If you satisfy a condition of release, such as retirement, and you can access your super benefits, then how you spend your super benefits on is up to you. Once a person satisfies a condition of release, how that money is spent is nobody else’s business.
If you run a self-managed super fund (which is unlikely if you have been living overseas for an extended period), then there may be opportunities to purchase property within your super fund, but generally not for personal use. The only exception to personal use within a self-managed super fund is where the property is a business-related property, such as an office, factory or shop, and then it may be possible to lease the property from your super fund. For more information on super and property, see SuperGuide article Property and super: What’s the deal? (15 popular Q & As).