There are limited circumstances that allow you to access your super, so ensure that you are aware of these conditions before attempting to withdraw your contributions. 

The Australian Taxation Office (ATO) enforces super laws, and non-compliance can lead to fines, taxes and even imprisonment.

When can I access my super?

Accessing your super isn’t allowed until you satisfy certain conditions that are set in the SISA. There are three conditions of release that will legally allow you to access super. These are:

1. Full retirement upon reaching preservation age
2. Commencing a transition to retirement income stream (TRIS)
3. Reaching age 65 with or without gainful employment

What is “preservation age”?
Preservation age refers to the age when you can gain partial access to your super through a TRIS or full access if you are fully retired. It is not the same as pension age, which refers to the age when eligible Australian seniors may start receiving age pension from the government.

Below is the superannuation preservation age table for reference:

The superannuation preservation age is the same whether you belong to a super fund or a self-managed superannuation fund (SMSF).

Full retirement upon preservation age

According to super laws, you can only access your super and claim a lump sum or commence an income stream once you fully retire and have no intention of taking up another full-time work in the future.

But simply terminating your gainful employment to immerse in a retirement lifestyle doesn’t automatically release your super. To get access to your super, you must also have reached your preservation age (refer to the table in the previous section).

If you satisfy both conditions, you may apply to access your super with your fund manager.

Commence a TRIS

Transition to retirement is when you gradually leave the workforce by working with reduced hours or work part-time in your current employment while making salary sacrifice contributions to super.

TRIS allows eligible workers to access a portion of their super contributions as an income stream without retiring. However, income from the taxable component of TRIS is subject to tax at your marginal tax rate with a 15 per cent offset, and income from assets in the TRIS phase are taxed within the fund at 15 per cent.

TRIS is only available to members of accumulation super funds. Those who own defined benefit funds do not have a TRIS option. If your fund can accommodate a TRIS scheme, they will transfer a portion of your total balance in a TRIS account and begin your income stream. However, if your fund cannot accommodate a TRIS, you may have to open a TRIS account with another fund.

On the other hand, SMSFs may grant a TRIS if it is explicitly permitted in the SMSF trust deed.

Reaching age 65 with or without gainful employment

According to super laws, Australians will begin receiving pension from their super when they reach 65 years old even if they are still gainfully employed.

Accessing super early without satisfying any of the conditions above is considered illegal and can result in steep fines, taxes and jail time. As with any rule, however, there are exceptions.

Early release of super

You may apply for early release of superannuation if and only if you experience any of the five severe financial situations that grant early access.

Conditions for early release of superannuation

1. Severe financial hardship
2. Compassionate grounds
3. Temporary incapacity
4. Permanent incapacity
5. Terminal medical condition

Severe financial hardship

The ATO permits early release of super due to financial hardship for those who are unable to meet reasonable and immediate living expenses. However, they must be in receipt of financial support from the government for 26 weeks, including the time of application for early access to super.

A one-time withdrawal of $1,000 to $10,000 is allowed in any 12-month period, provided that the account has enough balance.

Compassionate grounds

A withdrawal on compassionate grounds is permitted for those who need financial assistance to pay for their own or their dependants’ medical, disability or death-related expenses. The member may also withdraw up to three months’ worth of mortgage payment and 12 months’ worth of loan interest if they are solely responsible for mortgage payments and they are about to lose their home.

Temporary incapacity

Withdrawals due to temporary incapacity may be granted if a member temporarily needs to stop working as a result of physical or mental disability. However, this will only be permitted by the ATO if the member isn’t using their sick leave during their time off.

Permanent incapacity

If a member is unable to work permanently due to their disability even if they are qualified to do so, an early withdrawal due to permanent incapacity may be permitted.

Terminal medical condition

If a member is diagnosed by two medical professionals with a terminal medical condition that can result in death within 24 months, they may be granted an early withdrawal without cashing restrictions.

How can I access my super

Depending on the satisfied condition that legally allows you to draw on your super early, you may apply to withdraw your superannuation early with your super fund or the ATO.

Applying through the fund
You should apply for early withdrawal to your super fund for the following conditions:

• Severe financial hardship
• Terminal medical condition

Your fund may contact the Department of Human Services (DHS) or access Centrelink to confirm your circumstances or ask you to provide information about the income support payment you receive from DHS. Once the information is verified, your fund will process your application.

Applying through ATO
If you are claiming your superannuation early due to financial hardship or any of the other exceptions, you must lodge an application with the ATO.

Accessing your super is simple with ATO’s online services. Simply access your myGov account and link it to ATO then apply to release your super on compassionate grounds. Give the ATO a few days to verify and process your request and, if approved, you should be able to receive a portion of your super balance 

Withdrawing super
You can also apply to take your money out of your super fund if your balance is less than $200 or you are a temporary resident who is permanently leaving Australia.

What are the superannuation death benefits?

Super death benefits refer to the lump sum or income stream from super that is paid to a person’s nominated beneficiary in case of death. You may choose a beneficiary who will receive your superannuation death benefit payments by making a binding or non-binding death benefit nomination.

Binding death nomination
This refers to a type of nomination that the trustee (super fund manager) and/or executor of your estate must adhere to. That is, the trustee has no choice but to pay out your death benefits to your chosen beneficiary.

Non-binding death benefit nomination
A non-binding nomination is treated more as a suggestion than the fund member’s will as the trustee is not bound to follow the deceased person’s wishes. That is, trustees have the discretion whether to pay out the deceased member’s super to their nominated beneficiary or give it to another person who is connected to the estate.

Are super death benefits taxed?

There is no inheritance tax in Australia, but death benefits may be taxed depending on the beneficiary’s relationship to the deceased member.

Superannuation death benefits paid to a dependant
Dependants don’t pay tax on the tax-free component of the death benefit whether they receive it as a lump sum or income stream. For the taxable component, the death benefit may be taxed at the beneficiary’s marginal tax rate with an offset of up to 15 per cent, depending on the ages of both beneficiary and deceased

Superannuation death benefits paid to non-dependant
Non-dependants are also exempt from paying tax on the tax-free component of super paid out as a death benefit lump sum or income stream. However, the taxable component may only be received as a lump sum and the applied tax rate will depend on whether the money has already been taxed within super.