When can I access my Super?

Wednesday, August 07, 2019

In regard to the definition of “retirement” the Superannuation Industry Regulations define two different sets of conditions with regard to determining if ‘retirement has occurred’ and the retirement ‘condition of release have been met’.

In general, most superannuation benefits are ‘preserved’(inaccessible) and can only be accessed on meeting a “condition of release”.

There can be confusion around the taxation of superannuation benefits (post-60) and the ability to access preserved benefits. Many believe that because they have turned 60 and their superannuation benefit (paid from a taxed superannuation fund) is tax-free, they can also access their benefit.

Once you turn 65 your superannuation benefits become unrestricted non-preserved and you can access your super money. It is irrelevant whether you have retired or not.

In regard to the definition of “retirement” the Superannuation Industry Regulations define two different sets of conditions with regard to determining if ‘retirement has occurred’ and the retirement ‘condition of release have been met’.

Once you have reached your preservation age you have access to your Super under certain conditions. Preservation age is the age at which you are eligible to access your superannuation – this can be as young as 55yrs depending on your year of birth.

Once you reach this preservation age you can choose a ‘Transition to Retirement Pension’ arrangement, meaning you can still work and draw 4% - 10% (max)  annually of your superannuation investment to supplement your income.  You will however pay 15% tax on this income until you turn 60 when income payments from your super are tax free

If you retire between your preservation age and turning 60 you can have full access to your super only if you meet the conditions below

1. The member has ceased work AND
2. They have no intention of becoming gainfully employed again, on either a part-time or a full-time basis (i.e., 10 hours per week or more). 

The obligation of being satisfied that a condition of release has been met rests with the trustees of the member’s superannuation fund.

The second part of the retirement definition specifically applies to members aged between 60 and 65.  In essence, where a member has ceased an arrangement under which they were gainfully employed, since turning 60 years of age, they have met the retirement condition of release. There is no requirement to intend to never work again. Technically, a person aged 60 or over could cease to be gainfully employed one day, and commence a new employment arrangement (with another employer, or become self-employed) the following day, week, or month and have access to all or part of their super.

However, be aware that if a person is aged between 60 and 65, and they ceased to be gainfully employed before their 60th birthday, they are still subject to the first definition: that is, they have no intention of resuming gainful employment.

Accessing superannuation benefits and applying the conditions of release can be complex. There are several conditions of release that may be available; however, a clear understanding of the law is essential and it is best to consult your Financial Adviser before access your funds.   

For more Information contact Mark Digby at Maher Digby Securities Pty  Ltd - Financial Advisers – AFSL No. 230559  Ph: 07 5441 1266 or visit our website www.maherdigby.com.au  This document was prepared without taking into account any person’s particular objectives, financial situation or needs. It is not guaranteed as accurate or complete and should not be relied upon as such.  Maher Digby Securities does not accept any responsibility for the opinions, comments, forward looking statements, and analysis contained in this document, all of which are intended to be of a general nature. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. We recommend consulting a financial advisor

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