Accessing your money
Super is a long-term investment, designed by the Government to pay for your retirement. It has set rules for when it can be accessed, which are generally the same for all super funds.
When can I access my super?
- After you reach preservation age;
- In times of financial hardship;
- On compassionate grounds;
- If you're a temporary resident permanently leaving the country; or
- If you are terminally ill or permanently incapacitated.
What’s my preservation age?
Your preservation age is the minimum age, set by law, that your super must be 'preserved' until. Your preservation age is currently between 55 and 60, depending on when you were born.
When you reach preservation age, you can access your super as long as you are permanently retired (or reached age 65). If you haven't permanently retired, you can still access part of your super via a transition to retirement pension.
|Date of birth||Preservation age|
|Before 1 July 1960||55|
|1 July 1960 to 30 June 1961||56|
|1 July 1961 to 30 June 1962||57|
|1 July 1962 to 30 June 1963||58|
|1 July 1963 to 30 June 1964||59|
|1 July 1964 and onward||60|
Retirement benefits & retirement income options
Once you have reached preservation age and the terms of release, you can choose to receive your super as a:
- lump sum (part or the whole amount deposited to your bank account) or
- an account-based pension, also known as a retirement income stream (e.g. $500 a fortnight)
- or a combination of both.
Seek financial advice if you need help working out what's best for you.
Transfer balance cap
There is a limit on how much money can be held in an account-based pension. This is called the transfer balance cap and is currently set at $1.6 million. Details of this and other changes to super are available on the Australian Tax Office (ATO) website.
Cashing in your super
When you retire you can take your super as a lump sum. You don't have to take it all at once, you may decide to leave it in super and withdraw it a bit at a time as you need it.
Taking your super as a lump sum can have tax and Centrelink implications. If you make a mistake you might not be able to put the money back into super.
If you are aged 60 or over you can withdraw your super tax-free. If you are under age 60 you may have to pay tax depending on the components of your super.
If you would like to access your super, please contact us on 1800 060 312.
Accessing super early
Super is a long-term investment for your retirement, so you normally can’t access it until you’ve reached your preservation age. However, there are some special circumstances where you may be eligible to access your super early or before reaching your preservation age.
If you want to access your super before reaching your preservation age, you will need to prove you have met a condition of release. Reasons for requesting access to your super early include:
- Financial hardship
- Compassionate grounds
- Terminal illness or permanent incapacity; or
- If you’re a temporary resident permanently leaving the country.
Accessing your super early unless you meet a condition of release is illegal.
Beware of people promoting early release of super schemes. They might tell you they can help you open a SMSF to access your super to pay off credit card debt, buy a house or car, or go on a holiday. These schemes are illegal. Before accessing your super early, it’s important to consider how it will impact your retirement, taxes and what affect it will have on any other benefits you’re receiving.
There are also strict conditions and requirements that need to be met to demonstrate your eligibility.
What is considered ‘severe financial hardship’?
You are considered to be in ‘severe financial hardship’, if you satisfy one of the following two scenarios:
- You have received Commonwealth income support payments for a CONTINUOUS period of 26 weeks AND You are unable to meet reasonable and immediate family living expenses.
Income support includes NewStart allowance, Disability Support, parenting payment, carer’s payment, and widow allowance, but does not include Austudy payments, or Youth Allowance paid to students in full-time study.
- You have reached your preservation age and you have been in receipt of Commonwealth income support for a CUMULATIVE period of 39 weeks after you reached your preservation age, and this is confirmed by written evidence provided by at least one Commonwealth department or agency responsible for the income support payments.
If you are under 60 years old, your benefit is generally taxed between 17% and 22%. If you are over 60 years old, you will not be taxed.
To enquire about applying for financial hardship, please call legalsuper on 1800 060 312.
Early release under Compassionate grounds must be to cover specific unpaid expenses, including:
- Mortgage assistance
- Medical treatment
- Medical transport
- Modifications to home and/or vehicle where a fund member or fund member’s dependant suffers a severe disability
- Funeral or burial or other expenses related to the death of a dependant, that is, the deceased person was financially, domestically or personally reliant on you; or
- Palliative care for a terminal condition suffered by you or one of your dependants.
The amount of super you can withdraw is limited to what you reasonably need. It is paid and taxed as a normal super lump sum. If you are under 60 years old, this is generally taxed between 17% and 22%. If you are over 60 years old, you will not be taxed.
Read more about compassionate grounds on the ATO website.
By law, legalsuper must pay the ATO the benefit of any temporary resident who has departed Australia (and whose visa has not expired or been cancelled) if it is not claimed within six months of departure. On request, legalsuper will provide an exit statement to a non-resident. Visit ato.gov.au for more information.