Generally speaking it is only possible to access your superannuation when you retire and are over your preservation age (which is between 55 and 60 depending on when you were born). You may also be able to access some of your superannuation if you’re over your preservation age and still working, via a Transition to Retirement Pension.
There are some other limited circumstances, though, in which it’s possible to have all or part of your superannuation released
(Be aware that some promoters claim to offer early access to your super by transferring your super into a self-managed super fund. These schemes are illegal and heavy penalties apply if you participate)
Access on compassionate grounds
Compassionate grounds include:
- paying for medical treatment for you or a dependant
- making a payment on a loan to prevent you from losing your house
- modifying your home or vehicle for the special needs of you or a dependant because of a severe disability
- paying for expenses associated with a death, funeral or burial of a dependant.
Access due to severe financial hardship
You may be able to withdraw some of your super if you have received eligible government income support payments continuously for 26 weeks and are unable to meet reasonable and immediate family living expenses.
A super withdrawal due to severe financial hardship is paid and taxed as a super lump sum.
The minimum amount that can be paid is $1,000 (unless your super balance is less than $1,000) and the maximum amount is $10,000. You can only make one withdrawal from your super fund because of severe financial hardship in any 12-month period.
There are no cashing restrictions under severe financial hardship if you have reached your preservation age plus 39 weeks and you were not gainfully employed on a full-time or part-time basis at the time of application.
Access due to terminal medical condition
You may be able to access your super if you have a terminal medical condition.
A terminal medical condition exists if:
- two registered medical practitioners have certified, jointly or separately, that you suffer from an illness, or have an injury, that is likely to result in death within a period (certification period) that ends no more than 24 months after the date of the certification
- at least one of the registered medical practitioners is a specialist practising in an area related to your illness or injury
- the certification period for each of the certificates has not ended.
Access due to temporary incapacity
You may be able to access your super if you are temporarily unable to work or need to work less hours because of a physical or mental medical condition. This condition of release is generally used to release insurance benefits from a super fund.
You will receive the super in regular payments (income stream) over the time you are unable to work. A super withdrawal due to temporary incapacity is taxed as a normal super income stream.
Access due to permanent incapacity
You may be able to access your super if you are permanently incapacitated. This type of super withdrawal is sometimes called a ‘disability super benefit’.
Your fund must be satisfied that you have a permanent physical or mental medical condition that is likely to stop you from ever working again in a job you were qualified to do by education, training or experience.
At least two medical practitioners must certify this for you to receive concessional tax treatment.
You can receive the super as either a lump sum or as regular payments (income stream). A super withdrawal due to permanent incapacity is subject to different tax components.
Super less than $200
You may be able to access your super if your employment is terminated and the balance of your super account is less than $200, or if you have formerly lost super held by a super fund or by us that is less than $200.
It’s important to obtain advice before accessing your superannuation under any circumstances. Different taxation rates can apply and government pensions and allowances can be effected. You should also consider the long term impact on your finances if you cash out some or all of your superannuation benefits prior to retirement.
If you would like to discuss accessing your superannuation, give the team at Steve May a call and start a conversation today.
You need to consider with your financial planner (or adviser), your objectives, financial situation and your particular needs prior to making an investment decision. Sensibly Pty Ltd and its authorised representatives (or credit representatives) do not accept liability for any errors or omissions of information supplied on this website
Nick Shanley, Steve May, Luke Styles and Shanley Financial Planning T/A Steve May Financial Services are Authorised Representatives / Corporate Authorised Representative of Sensibly Pty Ltd, AFSL 533923. Please refer to our website at www.stevemayfs.com.au to reference our Financial Services Guides.
