Under what Circumstances can one withdraw their Superannuation Funds - A Full Guide

A lot of people from Australia are facing rough times, particularly with changes in structure that are economically affecting us. The difficult truth is that mortgage repayments and day-to-day living costs persist despite the experience of ill fortune, boredom, and disease.

There are millions of people in Australia and from other parts of the world who are asking about how and when they can acquire their superannuation benefits in Australia. That is a testimony of how many people are struggling with money and how essential super benefits are.

The good news is, there is a way for you to withdraw your super money should the need arrive. But it wouldn’t be like withdrawing money from the ATM. There are certain steps and requirements you need to follow to take advantage of you super benefits.

In this post, we will discuss different legitimate means of with withdrawing your super money with Australian Super Finder. So Read on...

The Preservation Age

Getting your super benefits implies that you have to meet a few super qualifications. Simply put, there are 14 different methods to activate your superannuation early (or for your closest of kin to activate your superannuation should you pass away), which are enumerated later in the article.

How is ‘preservation age’ essential?

More often than not, you cannot acquire your super before reaching your age of preservation then retire afterward. Preservation age denotes 55 years of age for individuals who were born before July 1960, yet at least 56 years for individuals born past June 1960, and at the very least 57 years for people born past June 1961.

• If you were born past June 1964, then your age of preservation is 60 years. Your age of preservation can, therefore, be age 55, or 56, or 57, or 58, or 59, or age 60, based on your birthdate.
• ‘Preservation’ in this sense just implies being locked away, although a few Australians who have had super accounts before 1999 might also have a few ‘unrestricted non-preserved’ privileges that they could get to whenever they want.
• ‘Preserved’ privileges do not imply that your super advantages are fixed and guaranteed amounts. It is just that they are being locked away until the time you reach your age of preservation and retire afterward, or, meet another condition for release.

For more information about preservation age, refer to Australian Super Finder knowledge base. You can also refer to the table below in determining the preservation age.

PRESERVATION AGE TABLE

Date of Birth Your Preservation Age
   
Before 1 July 1960 55
From 1 July 1960 until 30 June 1961 56
From 1 July 1961 until 30 June 1962 57
From 1 July 1962 until 30 June 1963 58
From 1 July 1963 until 30 June 1964 59
On or after 1 July 1964 60 60

When could I get my super advantages?

In many scenarios, you can only acquire your superannuation should you meet a certain condition for release. Qualifying for a condition for release implies that your preserved privileges can be gotten to right away (or as soon as possible), granted that the rules of your fund must also allow you to get your superannuation.

Even if the more general superannuation rules could allow early access, a few superannuation funds don’t allow access to superannuation privileges wherein a person has applied on the grounds of serious financial difficulties or grounds of sympathy.

You will have to verify with your superannuation fund if your fund permits early access based on these circumstances.

The Terms for Release based on super policies are:

• Time of Retirement
• 60 to 64 years of age and termination of employment
• Reaching 65
• Decided to begin a TRIP or transition-to-retirement pension
• Amount preserved is below $200
• Terminated employment and have particular pre-1999 superannuation advantages
• Serious financial difficulty
• Grounds of sympathy
• Grave medical condition
• Short-term resident departs Australia for good
• Long-term disability or long-term incapacity
• Short-term incapacity
• Demise
• Decided to get your privilege as a lifetime benefit or annuity

Australian Super Finder provides good advice to individuals looking to withdraw their Super money before retirement. We will assess your situation and help you determine whether you are qualified for the early release of your super benefits.

Conditions of Release of Your Super Payments

1. Time of Retirement

• Retirement is the least unusual term of release. You can quit working by the time you have finally reached your age of preservation, and you retire. Age of preservation now ranges between the ages of 56 to 60 years, based on birth date – see table earlier in the article.
• Your superannuation fund is usually going to need a declaration of retirement proving that you have retired.
• People in Australia can have an age of preservation of 55 years (for those born July 1960), or a minimum of 56 years and maximum of 60 years (for people born on or after 1 July 1960), based on specific birthdate.
• Currently, if an individual is 57 years old, then they were obviously born before July 1961 meaning that this individual is going to have an age of preservation of 55 or 56 years. If an individual is born past June 1961, then the age of preservation ranges between 57 years and 60 years old.
• Somebody who is presently 57 years old (which means, born before July 1961) and has retired could get to superannuation benefits right away, qualified to completion of the documents with the pertaining superannuation fund.

If are already at your age of preservation with no intention of retiring then you have to meet a term of release (aside from retirement) to get to your privileges.

A few examples of some of the usual terms of release are:

• starting a TRIP or transition-to-retirement pension which simply means that a person does not need to reach retirement to get to super privileges as a source of income, granted that the person has reached the age of preservation
• reaching 65 years old
• resignation or leaving a job on or after reaching 60 years old

Tax on superannuation privileges

• Tax is typically payable on superannuation privileges acquired before reaching 60 years old, even if an individual's tax bill is based on the structure of a person’s superannuation privileges and personal tax circumstances.
• In case you are a public servant then there is a possibility that you might need to pay extra tax on your superannuation privileges (if your superannuation privileges are derived from what is commonly known as a source without taxes).

If you want to know more about this condition of release, feel free to consult us at Australian Super Finder. We would love to give you sound advice.

2. Aged 60 years old to 64 years old, and has terminated employment

• There is a unique ‘retirement’ policy for people who are aged 60 or above who have stopped an employment term. A somewhat unpopular sub-category of the ‘retirement’ term of release is when an individual is 60 years old or above but below the 65 years old, and they have discontinued an employment contract, they could be termed as ‘retired.'
• For these situations, the individual could be termed as ‘retired’ for the technical reason of acquiring superannuation, even they do not have any plans of retiring, and they could return to their job. If a job contract goes on, however, then reaching 60 is by its account not a term of release.
• A somewhat unfamiliar term of release is when somebody is 60 years old or above (but below 65 years old), and they stopped an employment contract. For these situations, the individual can be termed as ‘retired’ for the sole reason of acquiring superannuation privileges.
• If the usual employment contract persists, however, then going 60 by its accord is not termed a release condition.

Before you start your withdrawal process - you would like to find and claim all lost accounts - into one place - and you can simply do that by filling this form out.

3. Turning 65

• When you turn 65 years old, you can acquire your whole super privilege (should you desire), even if you have not declared retirement from employment, yet you do not need to.
• A somewhat unfamiliar release condition is when somebody is 60 years old or above (but below 65 years old), and they stop an employment contract. In these cases, the individual could be termed as ‘retired’ for the technical reason of acquiring superannuation privileges.
• When the same arrangement of employment persists though, then going 60 by itself cannot be considered a release condition.
• A person who is aged 63, for example, must then have to satisfy a release condition, such as, say, retirement or starting a TRIP or transition-to-retirement pension, to get to preserved superannuation privileges.

4. Deciding to begin a TRIP or transition-to-retirement pension

• You can acquire a part of your benefit every year by beginning a superannuation pension without retirement, granted that you have reached the age of preservation (55 years if born prior to July 1960, or between 56 to 60 years old, if born past June 1960) and you get not above 10% of the balance on your account as pension payment/s per year.
• In almost all cases, the TRIP is non-transferrable, that is, you cannot transfer your pension account into a payment of lump sum.
• A TRIP (what has always been termed a transition-to-retirement-pension, and now the federal government has selected as well to follow our naming convention and termed it a TRIP) lets anybody from Australia who has reached the age of preservation (at a minimum of age 55, and gone to about 56 years or above since July 1, 2015, based on your birthdate), to acquire his or her super privileges in pension form without retirement or fulfilling an extra release condition.
• A few people could begin a TRIP or transition-to-retirement pension just because they need the additional money for survival, and to cover daily costs.
• The most important sales pitch however for a lot of people thinking about the decision to begin a transition-to-retirement-pension, is that, until June 30, 2017, when you are still at work, you can reach the advantages of tax linked to super pensions (income sources) while rerouting additional donations to your superannuation account.

TRIP can be a complicated matter. But our advisers in Australian Super Finder can help you make this transition in your super funds.

5. Amount preserved of superannuation privileges is below $200

• You can reach your preserved privilege if you resign from an employment where your employer was donating to your fund for your benefit, and the super preserved benefit is below $200.
• The super policies also let a superannuation benefit which is below $200 to be acquired where, the superannuation account is known to be in the possession of a lost member, the account is consequently discovered by the member of the fund, and the value of the superannuation benefit after released is below $200.

6. Stopped employment and have specific pre-1999 superannuation privileges

• If you had been a superannuation fund member ever since before July 1, 1999, you could cash the ‘non-preserved restricted benefit’ (particular benefits accrued up to June 30, 1999) only when you stop employment with whoever hired you, who has been your employer ever since July 1999 prior.
• A restricted privilege is a unique category of superannuation privilege that people in Australia could have, however only if they were members of superannuation fund before July 1, 1999, and even so, they might not have these privileges.

Under such circumstances where you have lost track of super money and you have no idea where it is, you can depend on us to find your lost Super. We at Australian Super Finder specialize in finding lost super.

7. Serious financial difficulties

Should you fall on tough times, you might be able to acquire a few of your super back if you fulfil the unique terms that make up the government’s outlook of ‘serious financial difficulty.' The benefactor of your fund could provide you access to a part of your privilege, under specific circumstances.

In broader terms, these are the policies:

a. You have been acquiring Commonwealth Government income benefits, for example, unemployment privileges, for a minimum of 26 weeks, non-stop, and the benefactor of your superannuation fund is content that you couldn't meet urgent reasonable family costs. Whatever payment you have made for the intentions of fulfilling daily living costs and can be a single payment not above $10,000 (tax included) during any 12-month duration.

You are labelled as someone in ‘serious financial difficulty’ based on the superannuation policies if the benefactor of your super fund is fulfilled by the following two conditions:

• You have acquired Commonwealth income support amounts for a non-stop period of 26 weeks. You can verify this with written proof given by Centrelink or a different Commonwealth agency or department (when relevant) accountable for the income support amounts, and you have to receive the income amount when the written proof is prepared. Income support is comprised of widow allowance, carer’s amount, parenting amount, Disability Support, and Newstart allowance but in this instance, excludes Austudy amounts, or Youth Allowance is given to students in full-time study, and;
• You are not able to see through urgent and reasonable family living costs.

If the trustee of your superannuation fund sees that you fulfill the conditions above, you can get up to $10,000 during every 12-month duration, and at least $1,000 (except if your superannuation privilege is below $1,000 and then you have to acquire the whole sum).

b. If you have reached the age of preservation (starting age 55 to 60, based on birthdate), you could be able to get your whole super advantage granted that you have been receiving government income payment for a minimum of 39 weeks.

Also, you will be labelled as somebody in ‘serious financial difficulty’ based on the superannuation policies if you fulfil the following terms:

• You have reached your age of preservation (age 55 for people who are born before July 1960, and a minimum of 56 years for those whose birthdate is on or past July 1, 1960).
• You have been receiving Commonwealth income amounts for a cumulative period of 39 weeks past reaching the age of preservation, and this is verified by written proof given by a minimum of a single Commonwealth agency or department accountable for the income support amounts.

When you are working, you could be working lesser than 10 hours every week. More particularly, at the time of the early access application, you have not been effectively employed for a part-time or full-time basis. Part-time employment is by definition working at a minimum of 10 hours a week, and not more than 30 hours per week.

• Should your superannuation fund allow early access based on serious financial difficulty, and you fulfil the above income, work as well as age support requirements, then you would be able to get to your whole super privilege.

At a time where you need your super money the most, you can opt for the services of Australian Super Finder in giving your sound advice and help you qualify for an early release of your super benefits.

8. Grounds of sympathy

• Before retiring, your superannuation fund can let go, partly or entirely, your preserved advantages if you are under the threat of a life-threatening condition, or attempting to avoid the bank selling your house due to overdue loan repayments.
• You could also try to qualify for early release of super on the grounds of sympathy as payment for medical or funeral costs, or palliative care.
• If you, or one of your beneficiaries, is seriously incapacitated, you could try to qualify to access your superannuation if this incapacity necessitates your car or home to be changed because of the incapacity.
• First, get in touch with your fund to discover whether or not it allows early release of whatever preserved privileges are available. If your fund does allow this kind of early access, you could then try to qualify for the Department of Human Services (www.humanservices.gov.au) for the early release of your preserved privilege on the grounds of sympathy.

Conditions encompassed under grounds of sympathy do not exclude needing help with costs that cover particularly:

• mortgage aid
• medical transport
• medical treatment
• transformations to the house and vehicle wherein a member of the fund or fund member’s dependent suffers a serious incapacity
• Palliative care for a grave condition (that is, in the case of unavoidable death) suffered by you or one of your dependents.
• burial or funeral or other costs linked to the demise of a dependent, that is, the deceased individual was personally, domestically, or financially dependent on you

The Department of Human services is also entitled to permit early access to superannuation privileges where the conditions are consistent with or linked directly to, one of the noted grounds listed above (subject to a determination by DHS)

Before you start your withdrawal process - you would like to find and claim all lost accounts - into one place - and you can simply do that by filling this form out.

9. Grave medical condition

If you are suffering a grave medical condition as described by the superannuation policies, you should be able to get to your superannuation privileges early. Additionally, you don't need to pay whatever privileges tax on those privileges.

‘Grave medical condition’ has a particular description, as described in the superannuation policies. A 'grave medical condition' happens about a person at a particular point in time should the following conditions be present:

(a) Two registered medical practitioners have verified separately or jointly, that the individual is suffering from a serious condition, or has received an injury, which is going likely to result in the demise of the individual within a given time (the ‘certification time’) that culminates in a maximum of 24 months past the date of the verification;
(b) A minimum of one of the medical practitioners registered is a professional whose field of expertise is in an area that is related to the illness or injury experienced by the individual
(c) For every single one of the certificates, the verification time has not culminated.

If you are under the threat of a grave illness, or a family member is under the threat of a grave condition, also verify release condition no 8 (grounds of sympathy).

10. Short-term resident departs Australia for good

• If you do not reside in Australia, you can get to your Australian super advantage when you depart Australia for good. You technically do not reside in Australia if you came to Australia on a legitimate short-term resident visa.
• Bear in mind that, based on this particular term, if you are a citizen of New Zealand or Australia, or a long-term resident of Australia, or if you have a visa for retirement, then you are unable to get to your superannuation privileges upon leaving Australia for good, even if citizens of New Zealand might be capable of transferring Australian superannuation advantages to an account with KiwiSaver.
• Short-term residents are not treated similarly based on the superannuation policies based on getting to superannuation privileges early. However, you must verify with the Australian Tax Office about the manner the policies are particularly relevant to your situation.
• If a certain person has held a short-term visa based on the Migration Act of 1958 (not including visas for subcategories 410 and 405), then such a person is qualified to go for a DASP or ‘Departing Australia Superannuation Payment’ upon departing Australia.
• In usual scenarios, a super fund has to move the short-term resident’s superannuation privileges to the Australian Tax Office if the person has not requested for the privileges within a period of 6 months of leaving Australia, or within a period of 6 months of the cancellation or expiration of the visa, whichever would be later.
• A short-term resident does not have to request for his or her superannuation privileges upon departing the country or, at a much later time. It is probable to relegate the privileges in Australia until the time that the individual retires, however, if the superannuation privileges are moved to the Australian Tax Office, the amount is not spent on behalf of the individual. This simply means that the superannuation advantage does not get any investment generations or pay premiums of insurance.
• Instead, ever since July 1, 2013, the superannuation advantage receives some ‘interest.' The ‘interest’ is going to be paid at an amount equal to the inflation rate – CPI or Consumer Price Index on all super accounts requested from the Australian Tax Office.
• If you think that superannuation accounts had stayed with the superannuation fund, then you should have anticipated investment earnings (and at times investment losses) minus the fees.

The whole process involving this condition of release can be a bit tedious. If it’s too complicated for you to handle, Australian Super Finder will guide you through the whole process and help you get qualified for a condition of release.

11. Long-term incapacity or long-term disability

• In case you are suffering grave illness or severe disability you could be able to request on the whole and long-term disability insurance policy which could be linked to your superannuation account. Verify with your superannuation fund for the conditions and qualification of any insurance rule.
• Based on the super rules, you could also get to your superannuation privileges early if you are suffering ‘long-term incapacity,' which has a particular definition.
• You can get to your preserved superannuation privileges if you become permanently disabled, that is, the benefactor of your superannuation fund is convinced that, because of ill health, you’re not likely ever going to be employed in a job of which you are reasonably qualified by experience, training or education.

Possible TPD Insurance Coverage of Your Superannuation Fund

• My suggestion is that you verify with your superannuation fund to know whether you have any long-term disability insurance coverage with your superannuation account and whether your circumstance is covered, which could mean a larger payout if the policy qualifications are met.

Fulfilling Long-Term Disability Description

• Even if you do not have incapacity insurance coverage, where a person fulfills the description of ‘long-term disability’, he or she might be able to get to their superannuation benefits if the benefactor of a superannuation fund is understandably fulfilled that “the poor health of the member (whether mental or physical) causes it to be not likely that the member is going to get involved in profitable work in which the member is understandably eligible by experience, training or education” [Regulation 1.03C of SIS Regulations].
• For a superannuation fund benefactor to be convinced, you have to require separate validation from two doctors verifying that your long-term disability meets the description illustrated in the past paragraph.

Before you start your withdrawal process - you would like to find and claim all lost accounts - into one place - and you can simply do that by filling this form out.

12. Short-term disability

• Your fund could immediately give income protection insurance or could be able to qualify for such insurance through your super fund. If you are suffering from extended illness or incapacity, you can request for this insurance coverage and get the usual income, typically for up to two years.
• In a few situations, insurance groups are not going to pay on income protection requests if the privilege you were to acquire (for example, 75% of your usual salary) was given by a different source during the time that you were injured, like a workers’ compensation.
• The idea here is that you cannot be better off financially due to the injury. However, the insurance and workers’ compensation will be available to take care of the costs and replace the income.

What amount will be used for evaluating amount protection insurance coverage?

• I’m not certain what superannuation fund you are categorized under. However, I’m conscious that the ‘super fund income’ in a public sector fund is not the same as a person's actual income since the ‘income’ utilized is an average income.
• Your situations seem strange, however, and it could be a mistake, since I have verified the salary protection rules of a few superannuation funds, and all of the superannuation funds that I reviewed did not exclude total salary (including salary sacrificed donations and even regular overtime) as ‘income.'
• As an initial move, verify with whoever hired you to check whether they have not succeeded to update the documents they send to the superannuation fund. You could then approach your superannuation fund and verify what the description of ‘income’ is for the technical function of the fund’s salary protection insurance, and life insurance, and if it includes shift loading (which it has to).
• Also, many super funds allow persons to withdraw extra salary protection coverage or life insurance coverage, subjected to the application of particular details, and in most cases after going through a medical examination.
• Dealing with your insurance can be quite a hassle. If you want to get through this process with less hassle, Australian Super Finder can give you advice on how to deal with your insurance and how to be eligible of this super benefit.

Before you start your withdrawal process - you would like to find and claim all lost accounts - into one place - and you can simply do that by filling this form out.

13. Your Death

• Should you die, your super fund gives your death privilege to your property, or to your partner or other beneficiaries.
• If you intend to relegate your superannuation to your adult children when you pass away, your super death privilege could be hit with privileges tax, even if you would have acquired that privilege free of tax (if aged 60 or above) while still alive.
• The rationale behind this inconsistency is that super death privileges transferred to persons who are labeled as ‘non-dependents under the tax policies,' like financially independent adult children, can be still under a special ‘death tax.'
• If your death privileges are given to a person labeled as a ‘dependent based on tax policies,' but, no tax is payable on the privilege. Technically, this kind of dependent is termed as a “death privileges dependent” (based on the Salary Tax Assessment Act of 1997).
• Death privileges dependents (that is, dependents under the tax policies) include your partner, children below 18 years old, any person who is financially dependent on you (which could include adult children), or any individual who has a benefactor-beneficiary relationship with you (which could also include adult children).
• A child who is for the long-term disabled can be considered a death benefits dependent even when above 18 years old.
• In general, your dependents based on the super policies, or your legitimate personal representative, are the only individuals who could get a death privilege straight from your super fund.
• A person who is not your dependent under the superannuation laws could get your death privilege but, in most cases, this could only happen if the death privilege is given first to your estate.
• If you don't have any dependents, your death privilege is given to your estate.

Before you start your withdrawal process - you would like to find and claim all lost accounts - into one place - and you can simply do that by filling this form out.

14. Decided to get your privilege as a lifetime benefit or annuity

• Granted that you consider your superannuation as a non-convertible lifetime benefit or annuity, you can get to your superannuation at any age. A non-convertible lifetime benefit or annuity is something that you acquire for your lifetime but which you cannot change to a lump sum value.
• Usually, this lifetime benefit option is only present in older public sector superannuation funds. How you opt to acquire your benefit is a major decision. You cannot change your judgment, and your choice is going to affect your level of retirement comfort for the rest of your life.
• If your organization provides you with options, you have to meticulously balance the pros and cons of getting a lump sum as opposed to getting an annuity distribution before you make this long-term decision.
• A few organizations demand that you take your benefit plan in the form of an annuity amount; especially monthly amounts for your life.
• A lot of companies, however, are granting you the benefit of taking your privilege as a lump sum distribution rather than an annuity payout. Or, in other cases, you could get a portion of it as an annuity and a portion as a lump sum.

Before you start your withdrawal process - you would like to find and claim all lost accounts - into one place - and you can simply do that by filling this form out.

To determine the different items that you have to consider and learn how you have to do the calculations so you can compare alternatives, you can set a free consultation with Australian Super Finder. We will give you sound advice.

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Disclaimer: All information on this website is of a general nature only. We have not taken into account your financial situation, needs or objectives. You need to make up your own mind and ascertain yourself if it is right for you. We recommend you read the product disclosure statement(s) and the financial services guide before making any financial decision.

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© AUSTRALIAN SUPER FINDER 2014-2017. All rights reserved. Authorised Representative Number : 462591 | Under Libertas Financial Planning Pty Ltd | ABN 27 160 419 134 AFSL No. 429718.
All information on this website is of a general nature only. We have not taken into account your financial situation, needs or objectives. You need to make up your own mind and ascertain yourself if it is right for you. We recommend you read the product disclosure statement(s) and the financial services guide before making any financial decision.