When Can I Access My Superannuation in Australia?

Superannuation in Australia is a compulsory savings system designed to provide financial security in retirement. Employers contribute a portion of an employee’s earnings into a superannuation fund. Access to these savings is generally restricted until specific conditions are met, ensuring funds accumulate for the future.

Reaching Preservation Age

Preservation age is the minimum age at which an individual can access their super benefits, and it varies depending on their date of birth. For those born before 1 July 1960, the preservation age is 55. This age incrementally increases by one year for each subsequent birth year until it reaches 60 for individuals born on or after 1 July 1964.

Once preservation age is reached, superannuation can be accessed if an individual meets a specific “condition of release,” most commonly retirement. If a person is under 60 years old but has reached their preservation age, they can access their super if they cease gainful employment with no intention of returning to full-time work. For those aged 60 or over, ceasing any employment arrangement allows access to super without requiring a declaration about future employment intentions.

A “transition to retirement” (TTR) income stream offers an alternative for individuals who have reached their preservation age but are not yet fully retired. This strategy allows limited access to super as a regular income stream while still working, providing flexibility to reduce working hours without a significant drop in current income. These payments are typically “non-commutable,” meaning they cannot be withdrawn as a lump sum while still employed. If the individual is 60 or older, TTR pension payments are generally tax-free.

Accessing Super Early

Early access to superannuation is permitted only under specific, limited circumstances, recognizing the long-term purpose of these savings. These conditions are strictly regulated to protect an individual’s retirement balance.

Severe Financial Hardship

Individuals experiencing severe financial hardship may be able to access a portion of their super. If an applicant is under their preservation age plus 39 weeks, they must have received eligible government income support payments for a continuous period of 26 weeks and be unable to meet reasonable and immediate family living expenses. In such cases, the minimum withdrawal is $1,000, or the remaining balance if less, with a maximum of $10,000, and only one withdrawal is allowed in any 12-month period.

If an individual has reached their preservation age plus 39 weeks or more, they must have received eligible government income support payments for a cumulative period of 39 weeks since reaching preservation age and not be gainfully employed at the time of application. For this category, there is no restriction on the amount that can be withdrawn. Applications for severe financial hardship are made directly to the super fund, not the Australian Taxation Office (ATO). Withdrawals for severe financial hardship are taxed as a normal super lump sum, typically between 17% and 22% if the individual is under 60 years old.

Compassionate Grounds

Superannuation can generally be accessed on compassionate grounds for specific, essential expenses. Eligibility generally requires the applicant to be an Australian or New Zealand citizen or a permanent resident. Approved expenses include:
Medical treatment for a life-threatening illness or injury, chronic pain, or mental illness, as well as medical transport and palliative care for the individual or their dependants.
Modifications to a home or vehicle, or for purchasing disability aids due to a severe disability affecting the individual or a dependant.
Payments on a loan or council rates to prevent the loss of the individual’s principal place of residence.
Funeral and burial expenses of a dependant.

It is important to note that funds can only be released for unpaid expenses. The amount accessible is limited to what the ATO determines is reasonably needed for the specific expense. Applications for compassionate grounds are lodged through the ATO, and any withdrawals are taxed as a super lump sum, with rates similar to those for severe financial hardship, typically tax-free if the individual is 60 or older.

Terminal Medical Condition

Individuals diagnosed with a terminal medical condition may access their superannuation as a tax-free lump sum. A terminal medical condition is defined as an illness or injury that two registered medical practitioners, with at least one being a specialist in the relevant field, certify is likely to result in the person’s death within 24 months of the certification date. The 24-month certification period must not have expired. There are no set limits on the amount that can be withdrawn, though fund rules may apply.

Temporary or Permanent Incapacity

Superannuation can be accessed if an individual experiences an incapacity for work. Temporary incapacity refers to a physical or mental medical condition that causes an individual to temporarily cease gainful employment or work reduced hours, without constituting permanent incapacity. Benefits released under temporary incapacity are typically paid as an income stream.

Permanent incapacity, on the other hand, means that due to ill-health, either physical or mental, an individual is unlikely to ever engage in gainful employment for which they are reasonably qualified by education, training, or experience. This condition requires certification by at least two medical practitioners. Payments for permanent incapacity can be received as a lump sum or an income stream.

Small Super Balances

If an individual’s employment is terminated and their super account balance is less than $200, they can typically access these funds. No tax is payable on such withdrawals. Additionally, super funds may transfer inactive accounts with balances under $6,000 to the ATO as unclaimed money, which can then be claimed by the individual.

Accessing Super After Age 65

Upon reaching 65 years of age, individuals gain unrestricted access to their superannuation savings. Unlike the conditions for accessing super at preservation age, there is no requirement to meet a “retirement” condition or any other employment-related criteria. Funds can be accessed whether the individual is still working or has fully retired. This provides complete flexibility in how and when super benefits are drawn. Individuals can choose to withdraw their super as a lump sum payment or set up a regular income stream to support their lifestyle.

Accessing Super When Departing Australia

Temporary residents who have worked in Australia and accumulated superannuation may be eligible to claim a Departing Australia Superannuation Payment (DASP) upon permanently leaving the country. Eligibility for a DASP requires that the individual:
Accumulated super while on an eligible temporary resident visa (excluding subclasses 405 and 410).
Their visa has ceased to be in effect (either expired or cancelled).
Has left Australia without holding any other active Australian visa.
Australian or New Zealand citizens and Australian permanent residents are not eligible for DASP.

Applications for DASP can only be submitted after the individual has left Australia and their visa has ceased. The easiest method to apply is through the ATO’s online DASP application system, which requires details such as super account information, visa specifics, bank details, and passport number. While paper forms are also available, the online system is generally more efficient. If the super balance is $5,000 or more, certified identification documents may be required. Completed applications are typically processed within 28 days. If a DASP is not claimed, the super fund may transfer the money to the ATO as unclaimed super after six months of the visa ceasing, requiring the individual to claim it from the ATO.

A final DASP tax is withheld from the payment. The tax rate depends on whether the individual held a Working Holiday Maker (WHM) visa (subclasses 417 or 462) during the period super contributions were made. For those who never held a WHM visa, the ordinary DASP tax rates apply, which include 0% for the tax-free component, 38% for a taxed element, and 47% for an untaxed element. However, if any super contributions were made while holding a WHM visa, the entire DASP payment is subject to a 65% WHM tax rate. The DASP does not need to be included in an Australian tax return.