When Can I Access My Super Tax-Free?
Superannuation, commonly referred to as super, is a form of retirement savings that is available to working individuals in Australia. It provides an opportunity to accumulate wealth over the course of a person’s working life, ensuring financial security during their retirement years. While superannuation funds are predominantly intended to be accessed once an individual reaches preservation age, there are circumstances where you can access your super tax-free before retirement. In this article, we will explore when you can access your super tax-free and address some frequently asked questions regarding this topic.
Accessing your superannuation tax-free before retirement can be done under specific conditions, known as ‘conditions of release.’ These conditions may vary depending on your age, employment status, and personal circumstances. Here are some common scenarios where you can access your super tax-free:
1. Severe Financial Hardship: If you are facing severe financial hardship and meet certain eligibility criteria, you may be able to access a portion of your super tax-free. The amount you can withdraw will depend on your age and the number of years you have been receiving government income support payments.
2. Compassionate Grounds: In cases of specific financial hardships, such as medical treatment, palliative care, or preventing eviction from your home, you may be able to access your super tax-free. This requires approval from the Australian Taxation Office (ATO) after demonstrating genuine need and meeting specific conditions.
3. Terminal Medical Condition: If you are diagnosed with a terminal medical condition, you can access your superannuation tax-free. A terminal medical condition refers to an illness or injury that is likely to result in death within two years. You must obtain certification from two registered medical practitioners, including one who specializes in your condition.
4. Permanent Incapacity: In the unfortunate event that you become permanently incapacitated and unlikely to ever work again, you may be able to access your super tax-free. You will need to obtain certification from two medical practitioners that you meet the criteria for permanent incapacity.
5. Temporary Incapacity: If you are temporarily unable to work due to illness or injury, you may be able to access your super tax-free. You will need to provide evidence from a medical practitioner stating that you are unable to work in your usual occupation.
6. Transition to Retirement: Once you reach preservation age, you can access your super while continuing to work. You can receive a regular income stream or make lump sum withdrawals, both of which are generally tax-free.
Q: Is there a minimum age to access superannuation tax-free?
A: Yes, the minimum age to access super is known as the preservation age, which depends on your date of birth. It ranges from 55 to 60 years.
Q: Can I access my super tax-free if I resign from my job?
A: Generally, you cannot access your super tax-free if you resign from your job. However, you may be able to transfer your super to another fund or leave it where it is until you meet a condition of release.
Q: How much super can I access on compassionate grounds?
A: The amount you can access on compassionate grounds is determined by the ATO and may vary depending on your circumstances. It is recommended to consult with a financial advisor or the ATO for accurate information.
Q: Can I access my super tax-free if I am made redundant?
A: If you are made redundant or retrenched, you can access your super tax-free if you meet the criteria for severe financial hardship or compassionate grounds.
In conclusion, accessing your super tax-free before retirement is possible under specific circumstances outlined by the Australian Taxation Office. Whether you are experiencing severe financial hardship, facing medical emergencies, or are permanently or temporarily incapacitated, you may be eligible to access your superannuation tax-free. It is important to understand the conditions of release and seek advice from financial professionals to ensure a smooth and compliant process.