- Can you just change to part-time employment?
- How do you apply for your super benefits when you cease employment?
- Are there any limitations on how you can access your super benefits when you cease employment after 60?
- What are the tax implications?
- Can you change your mind and go back to work later?
- Other conditions of release
- The bottom line
Ceasing employment after you reach the age of 60 is a “condition of release”, or one way you that you can access your super in Australia. Ceasing employment means leaving a job, even if you get a job with another employer.
However, if you do get another job, you can only access the super benefits you’ve accumulated up to that point in time. Any super that you accumulate with your new employer must be preserved until you meet another super condition of release (such as turning 65).
It’s important to understand that in the superannuation context, ceasing employment after the age of 60 is different to retiring. To satisfy the retirement provisions of Australia’s super legislation, you must:
- Have reached your preservation age,
- Have ceased gainful employment, and
- Not have any intention of becoming gainfully employed again in the future.
Being gainfully employed means receiving any sort of monetary reward for working at least ten hours per week.
Learn more about reaching 60 and retiring as a condition of release.
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Note though that if you have two jobs you only need to cease one employment arrangement to meet this super condition of release. You can continue working in your other job.
Can you just change to part-time employment?
If you’re aged over 60, you can work part-time and still access your super provided that the role is with a new employer, not the employer you left to in order to meet your ‘ceasing employment’ condition of release.
Part-time work is classed as 10 to 30 hours per week in Australia.
How do you apply for your super benefits when you cease employment?
The requirements of different super funds vary, but most will generally require you to sign a form that declares you have met the ‘ceased employment’ condition of release. They may also require a declaration from your employer. You’ll also have to provide appropriate proof of identity before any of your super funds will be released after you’ve ceased employment.
It’s important to understand that trustees of super funds (including self-managed super funds) need to ensure that they comply with super legislation when paying benefits to fund members, otherwise harsh penalties can be imposed on them by the Australian Taxation Office (ATO).
Are there any limitations on how you can access your super benefits when you cease employment after 60?
No there’s not. When you’re eligible to access your super because you’ve met the ceased employment condition of release, you can choose to take your super payments as a lump sum, as an income stream (also known as a superannuation pension), or as a combination of both.
What are the tax implications?
When you cease employment after the age of 60, you can access your super funds tax-free, regardless of whether you receive lump sum payments, an income stream, or a combination of both.
Can you change your mind and go back to work later?
Yes you can. You can even get a job with a new employer straight away.
The only criterion to meet this condition of release is to cease an employment arrangement with one current employer after you’ve turned 60.
However, if you’re 65 or older and you go back to work with a new employer, you’ll only be able to make further contributions to your super fund if you satisfy the work test and you’re no older than 74. To satisfy the work test, you must work a minimum of 40 hours in any consecutive period of 30 days.
Other conditions of release
Besides ceasing employment after age 60, other common superannuation conditions of release are:
- Retiring from the workforce after you’ve reached your preservation age. Your preservation age is between the ages of 55 and 60, depending on your date of birth.
- Reaching your preservation age and beginning a transition-to-retirement income stream (TRIS).
- Reaching 65 years of age, even if you haven’t retired.
You can also access part of your super prior to reaching your preservation age in special circumstances, such as:
- If you become permanently or temporarily incapacitated.
- If you’re suffering severe financial hardship or from a terminal medical condition.
- On compassionate grounds.
Ceasing employment after the age of 60 is one of the ways you can access your super. You can return to the workforce with another employer any time if you want to, or if you have two jobs, you still meet this super condition of release if you cease your employment with one of your employers.
The information contained in this article is general in nature.