www.esuperfund.com.au

Early Access


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Preservation Age

Generally, you must reach preservation age before you can access your super. Use the following table to work out your preservation age.

Date of birth Preservation Age
Before 1 July 1960 55
1 July 1960 – 30 June 1961 56
1 July 1961 – 30 June 1962 57
1 July 1962 – 30 June 1963 58
1 July 1963 – 30 June 1964 59
From 01 July 1964 60

 

If you are aged under Preservation Age, you cannot access your Super Benefit unless you have an unpreserved benefit.  In most cases most Australians who are under Preservation Age will not have any unpreserved benefits and will have to wait until Preservation Age, in order to begin to access their Super Benefit.  It is however noted that it may be possible to access some or all of your Super Benefit when you are under Preservation Age under various other provisions as detailed below. 

 
 
Severe Financial Hardship - Under Preservation Age

A Member may access some of their preserved Super Benefit if they are under Preservation Age and they are experiencing severe financial hardship.  Subject to the governing rules of the SMSF, that is the SMSF Trust Deed, Members can seek release part of their Super Benefit by reason of suffering severe financial hardship if they satisfy both of the criteria below.  If both criteria below are met, the Member may withdraw an amount not less than $1,000 and not more than $10,000 in each 12 month period beginning on the date of the first payment.

Criteria 1

The Member has written evidence from at least one Commonwealth Department or Agency responsible for administering a class of Commonwealth Income Support Payments (e.g. Centrelink) that they have received Commonwealth Income Support Payments for a continuous period of 26 weeks, and

Criteria 2

The Member is unable to meet reasonable and immediate family living expenses.

If you access your Super Benefits under Preservation Age under the above "Hardship" provisions, then the Taxable Portion of the amount accessed is subject to tax at 22%.  This tax should be budgeted for when accessing your Super under the "Hardship Provisions" when you are under Preservation Age.

 
 
Severe Financial Hardship - Over Preservation Age and 39 weeks

A Member may access some of their preserved Super Benefit if they are age over Preservation Age and 39 weeks and experiencing severe financial hardship.  Subject to the governing rules of the SMSF, that is the SMSF Trust Deed, Members can seek release of their benefits by reason of suffering severe financial hardship if they satisfy both of the criteria below.  In this case, if the Member meets the criteria below, the Member may access their total super benefit.

Criteria 1

The Member has written evidence from at least one Commonwealth Department or Agency responsible for administering a class of Commonwealth Income Support Payments that they have been on an eligible Commonwealth Government Income Support Payment for a cumulative period of 39 weeks after they turn Preservation Age; and

Criteria 2

The Member is not gainfully employed on a full time or part time basis on the date of the application for their benefit.

If you access your Super Benefits above age Preservation Age under the above "Hardship" provisions, then the Taxable Portion of the amount accessed is subject to tax at 22%.  This tax should be budgeted for when accessing your Super under the "Hardship Provisions" when you are over Preservation Age.

 
 
Compassionate Grounds

Upon the receipt of written approval from the Department of Human Services (DHS), a Member may access their Preserved Super Benefit before they reach Preservation Age and are "Retired" on specified Compassionate Grounds.  Compassionate Grounds apply where a Member does not have the financial capacity to meet an expense arising from the following:

  1. Pay for medical treatment or medical transport for the member or a dependant. Two doctors (at least one a specialist), need to certify that the treatment is necessary to treat a life threatening condition or alleviate acute or chronic pain or mental disturbance and that treatment or transport is not readily available through the public health system.
  2. Make a payment on a home loan to prevent foreclosure or forced sale by the mortgagee of the member's principal place of residence. A written statement is needed from the mortgagee, stating that the payment is overdue and that failure to pay will cause foreclosure or sale of the home. The statement must also detail the amount of three months' repayments and 12 months' interest on the outstanding loan at the time the statement is made. The payment is limited in each 12-month period to the amount equivalent to the sum required for three months' repayments and 12 months' outstanding interest.
  3. Modify the member's principal place of residence, or vehicle, to accommodate the special needs of a member, or a dependant, arising from severe disability.
  4. Pay for expenses associated with palliative care for the member, in the case of impending death.
  5. Pay for expenses associated with a dependant's palliative care, in the case of impending death, or their death, funeral or burial; or
  6. Meet expenses in other cases where the release is consistent with the grounds outlined above as determined by the Department of Human Services (DHS).

Please visit the DHS website for further information about the early release of superannuation benefits on compassionate grounds, or contact DHS by phone on 1300 131 060.

If you access your Super Benefits before Preservation Age under the above "Compassionate Grounds" provisions, then the Taxable Portion of the amount accessed is subject to tax at 22%.  This tax should be budgeted for when accessing your Super under the "Compassionate Grounds" Provisions when you are under Preservation Age.

 
 
Permanent Incapacity

Permanent Incapacity, in relation to a Member who has ceased gainful employment, means ill health, whether physical or mental, where the Trustee is reasonably satisfied that the Member of the SMSF is unlikely, because of the ill health, ever again to be engaged in gainful employment for which they are reasonably qualified by education, training or experience.  Importantly if you satisfy this condition you can access your Super Benefit at any time and with no restriction.  

Importantly accessing your Super Benefit under the "Incapacity" provisions must be approved by the Trustee of your SMSF (i.e. you).  This is not a "loophole" allowing you to access your Super Benefit when under Preservation Age.  You must demonstrate and have evidence that evidence that you have satisfied the above conditions. Typically this will involve medical certificates from at least two appropriately qualified Medical Practitioners confirming the Member's Incapacity (one certificate with at least two Medical Practitioners' signatures is also acceptable).  This evidence must be produced at Financial Year end to ESUPERFUND in order to finalise the SMSF Audit.

If you access your Super Benefits before Preservation Age under the above "Incapacity" provisions, then the Taxable Portion of the amount accessed is subject to tax at 22%.  This tax should be budgeted for when accessing your Super under the "Incapacity Provisions" when you are under Preservation Age.

 
 
Temporary Incapacity

Where a person is Temporarily Incapacitated a non-commutable income stream can be paid from their SMSF for:

  1. The purpose of continuing, in whole or part, the gain or reward which the Member was receiving before the temporary incapacity, and
  2. A period not exceeding the period of incapacity from employment of the kind engaged in immediately before the temporary incapacity.

Importantly accessing your Super Benefit under the "Incapacity" provisions must be approved by the Trustee of your SMSF (i.e. you).  This is not a "loophole" allowing you to access your Super Benefit when under Preservation Age.  You must demonstrate and have evidence that evidence that you have satisfied the above conditions. Typically this will involve medical certificates from an appropriately qualified Medical Practitioner confirming the Member's Incapacity.  This evidence must be produced at Financial Year end to ESUPERFUND in order to finalise the SMSF Audit.

If you access your Super Benefits before Preservation Age under the above "Incapacity" provisions, then the Taxable Portion of the amount accessed is subject to tax at 22%.  This tax should be budgeted for when accessing your Super under the "Incapacity Provisions" when you are under Preservation Age.

 
 
Terminal Illness

If the Member has a Terminal Illness they will be able to access their Super Benefit irrespective of their age.  To satisfy this condition of release, the Member must be diagnosed with a Terminal Illness and provide the Trustee(s) with certification from two (2) medical practitioners (at least one of whom is a specialist in the illness) stating that the Member is suffering an illness which in the normal course, would result in death in a period of 24 months from the date of certification despite reasonable medical treatment. The relevant regulations have been amended to extend the life expectancy period from 12 months to 24 months. These changes took effect from 1 July 2015. Payments made under this provision are tax free.

 
 
Penalties for Early Access

If you begin to access your Super Benefit and do not meet one of the conditions allowing you to access your Super Benefit details in this "Access" section of our website, you are breaking the law and significant penalties may be imposed on you and SMSF (both criminal and civil).  So you must ensure you comply with the law when beginning to access your Super Benefit.