Did you know you need to meet certain criteria to be able to access your superannuation benefits? Read on to learn all about the conditions of release.
Superannuation Benefits – When and How to Access Them
Superannuation in Australia is designed to supplement the retirement income of fund account holders. In order to prevent people from abusing or prematurely obtaining superannuation benefits, several laws and regulations are in place.
Although it can be difficult to determine exactly when you are entitled to receive your superannuation benefits in Australia, in general, access is normally provided upon retirement or when you turn 65 (even without retiring).
To give you some clarity, we’ve provided more details on benefit payment standards (sometimes referred to as ‘conditions of release’) that allow members to access their super.
Conditions of release
Knowing exactly when you can withdraw funds from your super can be a tad challenging. However, there are actually a number of ways you might be able to use your super legally under Australian law.
The five most common terms or conditions of release are as follows:
- You’ve reached the preservation age (age 55 to 60, depending on your year of birth) and retire.
- You turn 65 (it doesn’t matter whether you retire or not).
- After the age of 60 and your work agreement is terminated even if you don’t retire.
- Beginning a transition-to-retirement income stream upon reaching preservation age or over.
- You pass away or die.
Super members born before 1 July 1960 may be eligible for access to preserved superannuation benefits payments at age 55 without having to quit their jobs or retire. However, this requires setting up a transition-to-retirement revenue stream.
Again, the typical age at which super benefits can be withdrawn as a lump sum payment is 65.
Note that between 1960 and 1964, the preservation age, which is defined by the Australian Taxation Office (ATO), rises by one year for every year within the period. This is why the preservation age is 60 for people who were born after 30 June 1964.
Early release of funds
Very few situations allow for the early release of superannuation funds. Specific medical issues, extreme financial hardship, COVID-19 (new coronavirus) and the First Home Super Saver Program are the main causes of these circumstances.
To be more specific, the following nine additional conditions of release can provide you early access to your super as long as you meet strict eligibility criteria:
- Release based on compassionate grounds.
- If you’re experiencing severe financial troubles.
- Upon receiving a terminal medical diagnosis.
- If you’re temporarily incapacitated from physical or mental illness.
- If you’re permanently incapacitated or your condition is irreversible.
- Participation in the First Home Super Saver Scheme.
- If you’re a temporary resident leaving Australia.
- If you stop working and have less than $200 in your super account.
- If COVID-19 has caused you to experience financial hardship.
In case a financial need arises and you’re wondering whether accessing your super is an option, make sure to review the conditions of release and speak to your financial advisor or super fund manager.
If this article has inspired you to think about your own unique situation and, more importantly, what you and your family are going through right now, please contact your advice professional.