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Superannuation benefits are designed to be preserved for your retirement, and super benefits in Australia can be broadly classified as being either preserved or non-preserved.
Preserved benefits include all contributions made by you (or on your behalf, such as the employer superannuation guarantee) since 30 June 1999, as well as all of your super fund’s earnings since that date, prior to you satisfying a condition of release.
These preserved benefits cannot be accessed until you have met a condition of release. In other words, they must be preserved, usually until you reach your preservation age. Your preservation age will be between the ages of 55 and 60, depending on your date of birth.
Non-preserved super benefits on the other hand include any benefits that don’t need to be preserved.
Types of non-preserved benefits
There are two basic types of non-preserved benefits: unrestricted and restricted.
1. Unrestricted non-preserved benefits
Unrestricted non-preserved benefits are the most common type of non-preserved benefits. They include any benefits that may be paid on demand by your super fund because you have already satisfied a condition of release, such as:
- Being aged over the preservation age and retiring.
- Being aged over the preservation age and starting a transition-to-retirement income stream (TRIS),
- Being aged over 60 and ceasing an employment arrangement,
- Being aged 65 or over.
If you meet a condition of release and keep money in your super fund, you have unrestricted non-preserved benefits.
Some eligible termination benefits received prior to 1 July 2004 are also unrestricted non-preserved benefits.
2. Restricted non-preserved benefits
Restricted non-preserved benefits include any employment-related contributions you may have made before 1 July 1999, excluding employer contributions. If you have restricted non-preserved benefits, you can’t access them until the employment arrangement they relate to has been terminated.
How can I find out if I have unrestricted non-preserved super?
You’ll be likely to have unrestricted non-preserved super if you have satisfied a super condition of release and you have ever been a member of a super fund. If you have lost track of your super over time, you can search for your lost super accounts via the myGov website.
How can I withdraw unrestricted non-preserved super?
If you have unrestricted non-preserved super, you can apply to your super fund to you’re your fund released as either a lump sum or a pension. There may be different release conditions for different conditions of release. For example, if you access your super after reaching your preservation age and retire before turning 60, any super payments you receive will be subject to tax. However, if you wait to access your super benefits until after you turn 60, they’ll be tax-free.
The bottom line
Non-preserved super benefits can be either unrestricted or restricted. Unrestricted non-preserved benefits are the most common type. You will have these benefits if you are a member of a super fund and have satisfied a condition of release. If you do, you’ll be able to access your super on demand as either a lump sum or a pension.
The information contained in this article is general in nature.