Superannuation is intended to encourage and preserve saving for retirement, so it is not surprising that there are strict conditions placed on how you can access the money you have accumulated.
Generally, accessing superannuation requires you to satisfy what is known as a ‘condition of release’, as well as any rules imposed by your particular fund. A condition of release can be granted on a number of grounds, so let’s take a look at the more commonly used ones.
Retirement is obviously the major reason that a condition of release would be satisfied, but what technically constitutes retirement?
Firstly, you must have reached your ‘preservation age’, which will be between age 55 and 60, depending on your date of birth. You will also need to sign a declaration to confirm that you have genuinely retired with no intention of returning to gainful employment, although you may work up to 10 hours a week. If circumstances change post-retirement and you need to go back to earning an income, you are permitted to return to full or part time work.
Reaching age 65
Regardless of whether you actually retire from work or not, you can gain access to your superannuation without restriction once you reach age 65.
Partial access if you are over 55 and still working
Partial access to your superannuation is possible if you have reached age 55, but still want to continue working. This can be done by drawing a non-commutable pension income, which can be up to 10% of your account balance per year. This is part of a ‘transition to retirement’ strategy and can be used to help you gain a more tax-effective income before retirement, while boosting your superannuation accumulation with extra contributions.
Severe financial hardship
Government regulations also provide for access to superannuation benefits if you suffer ‘severe financial hardship’. These rules are strictly defined and may only give partial access.
An example would be if you are unemployed and have been receiving social security benefits for at least 26 weeks and are unable to meet immediate family expenses.
You can access up to $10,000 for any 12 month period if you are below preservation age. Once you pass preservation age, you may be able to access your full superannuation benefit if you have been receiving government income support for at least 39 weeks, after reaching preservation age.
You may apply to gain access to some or all of your superannuation if there are extraordinary circumstances impacting on you or an immediate family member, such as a life-threatening illness, imminent mortgage foreclosure as a result of overdue loan repayments, medical or palliative care expenses or even a dependant’s funeral.
Terminal medical condition
If you are unfortunate enough to be diagnosed with a terminal medical condition that can be verified to the satisfaction of your fund, you will be able to access your superannuation benefits early without any tax payable. A terminal medical condition is generally defined as an illness or injury that is likely to result in the death within 12 months after the date of the certification.
Can you access super if you leave Australia permanently?
Accessing your superannuation is generally not allowed simply on the basis of you making a permanent move overseas. An exception is if you are a non-resident of Australia and have accumulated superannuation benefits while working in Australia.
Permanent disability or death
You can access your superannuation benefits if you suffer a health condition that leaves you permanently incapacitated and unlikely to ever be able to work in a job for which you’re qualified by education, training or experience. Assessment for a permanent disability claim can be quite rigorous to ensure it is genuinely a permanent incapacity.
If you die, your spouse or other dependants can access your superannuation benefits along with any life insurance amount that may have been implemented under the superannuation fund.