by Helen Hodgson, Curtin University The latest Productivity Commission report, Superannuation for Post-Retirement, highlights two aspects of post-retirement income policy that have recently attracted considerable attention: the age at which people should be able to access their superannuation, and whether lump sum ... Read more
Taking a super lump sum
Taking a super lump sum is an option if you have reached your preservation age and met a condition of release. Your preservation age is between 55 and 60, depending on your date of birth. Standard conditions of release for lump sum super withdrawals are:
- ceasing an employment arrangement after the age of 60, even if you get a job with a new employer,
- turning 65 years of age,
- becoming permanently incapacitated,
- being diagnosed with a terminal medical condition.
If you reach your preservation age and withdraw super before turning 60, the low-rate cap is a limit on the taxable components of your payments that can be taxed at the concessional super tax rate of 15%.
The low-rate cap amount for the 2018/2019 financial year is $205,000.
Lump sum super withdrawals are tax-free after the age of 60. What you do with your super lump sum after you withdraw it may affect your eligibility for the age pension. The alternative to withdrawing super as a lump sum is to take your super benefits as a pension.
Your dependants are also entitled to access your super as a tax-free lump sum when you die.
See also the SuperGuide section on taking a super pension.
Learn more about the key aspects of taking a super lump sum in the following SuperGuide articles:
Set out below are all SuperGuide articles that relate to Taking a super lump sum.