Super benefits are subject to withdrawal rules to protect your entitlements. Preservation rules prevent you from accessing your benefits until you satisfy a condition of release.
Super laws provide specific rules for when you can access your super. These are called conditions of release. In addition, the trust deed or governing rules of your super provider may set out more restrictive rules around payment of benefits.
You can access your super when you:
- reach your preservation age and retire
- reach your preservation age and choose to begin a transition to retirement income stream while you are still working
- are 65 years old (even if you have not retired).
You can also access super in some special circumstances, including:
- COVID-19 (novel coronavirus) – early release of superannuation
- compassionate grounds
- severe financial hardships
- terminal medical condition
- temporary incapacity
- permanent incapacity
- super less than $200
- temporary resident departing Australia.
If you reach your preservation age and withdraw super before turning 60, the low-rate cap is a limit on the taxable components of your payments that can be taxed at the concessional super tax rate of 15%.
- The low-rate cap amount for the 2020/21 financial year is $215,000.
- Lump sum super withdrawals are tax-free after the age of 60. What you do with your super lump sum after you withdraw it may affect your eligibility for the Age Pension.
- Your dependants are also entitled to access your super as a tax-free lump sum when you die.
- The alternative to withdrawing super as a lump sum is to take your super benefits as a pension.
- Once you take a lump sum out of your super, it is no longer considered to be super. If you invest the money, earnings on those investments are not taxed as super and may need to be declared in your tax return.