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Early Release of Superannuation Benefits

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Last amended: 13 August 2013

Release of benefits

The superannuation law allows release of preserved superannuation benefit when the person has reached preservation age and the person either:

  • has retired from gainful employment and
  • has reached age 65; or
  • is permanently incapacitated, or
  • is in severe financial hardship, or
  • can obtain release on compassionate grounds.
Early release of benefits due to severe financial hardship

Early release of benefits on the grounds of severe financial hardship is permitted when:

  • a person has met the income support payment requirements,
  • the superannuation fund trustee considers they are unable to meet reasonable and immediate family living expenses,
  • a person is not gainfully employed on a part-time or full-time basis, and
  • the rules of the superannuation fund permit release.
Severe financial hardship - income support requirements

The following table shows the conditions to be met for people who request the early release of their superannuation benefits to be classed as being in severe financial hardship. Different conditions apply where the superannuation benefit is held in the Superannuation Holding Accounts Reserve.

If a person's age is...

They are in severe financial hardship if they received an income support payment...

And withdrawals are ...

less than 55 years and 39 weeks

for a continuous period of 26 weeks immediately prior to application.

Pensioners also need to satisfy the superannuation fund trustee that they are unable to meet reasonable and immediate family living expenses

restricted to one withdrawal and a maximum $10,000  each twelve months.

55 years and 39 weeks or more

  • for a cumulative total period of at least 39 weeks since turning 55, and
  • are not employed.

People of this age who do not meet these requirements will also be able to access their superannuation if they meet the requirements for people less than 55 years and 39 weeks.

not restricted.

Superannuation Holding Accounts Reserve – income support requirements

The qualifying period of income support for superannuation investments in superannuation holding accounts reserve is fifty two weeks (continuous) for people aged less than 55 years and 39 weeks, and at least thirty nine weeks (cumulative) for people aged 55 years and 39 weeks or more.

DVA's role in the early release of benefits

Applications for release of superannuation benefits on the grounds of severe hardship are made to the person's superannuation fund, and must be submitted with a letter confirming the period of the person's income support payments received from DVA. DVA does not have any role in whether all of the conditions for early release of benefits have been met. DVA's only role is to supply, on request from a person, confirmation that the pensioner has received income support payments for the required period.

Notification of early release of benefits

Pensioners must notify DVA if any benefits are released, as this may affect their income support payments.    

More →

 

Pensioner's obligations

Chapter 12.1

 

More → (go back)

 

People who do not meet the severe financial hardship requirements

There are very limited compassionate grounds that allow a person who does not meet the income support requirements to gain access to their superannuation benefits. These include a requirement to pay for medical treatment or medical transport, mortgage assistance, modifications to a home and/or motor vehicle in the case of a severe disability, care for a terminal medical condition, or for funeral assistance. The Department of Human Services considers applications on compassionate grounds, and a person's superannuation fund trustee or retirement savings account provider can provide advice to pensioners.

 


 

 

The superannuation law includes:

  • the Superannuation Industry (Supervision) Act 1993; and
  • the Superannuation Industry (Supervision) Regulations 1994.

Section 5J(1) of the VEA defines a superannuation benefit, in relation to a person, as a benefit arising directly or indirectly from amounts contributed (whether by the person or by any other person) to a superannuation fund in respect of the person.

 

 

Preservation age is the age at which a person may be able to gain access to preserved benefits held in approved deposit funds, deferred annuities and superannuation. For most people, the preservation age is currently 55.

To access preserved benefits on reaching preservation age, a person must:

  •       be retired from gainful employment;
  •       have reached age 55;
  •       be permanently incapacitated;
  •       be in severe financial hardship; or
  •       obtain release on compassionate grounds.

The person must also meet the conditions of the particular fund's governing rules.

From 2015 to 2025, the preservation age will gradually increase to sixty years for people born after 1 July 1960. The preservation age for people born after 30 June 1964 will be sixty years.

 

 

Means a payment of:

  • job search allowance, or

  • youth training allowance.

 

 

A superannuation fund is defined in the VEA as being:

  • a fund that is or has been a complying superannuation fund within the meaning of section 45 of the Superannuation Industry (Supervision) Act 1993 in relation to any tax year; or
  • an Australian superannuation fund (within the meaning of the Income Tax Assessment Act 1997) that is not a complying superannuation fund mentioned in paragraph (a) in relation to any tax year; or
  • a scheme for the payment of benefits upon retirement or death that is constituted by or under a law of the Commonwealth or of a State or Territory; or
  • an RSA within the meaning of the Retirement Savings Accounts Act 1997; or
  • any of the following funds (unless the fund is a foreign superannuation fund):
  • a fund to which paragraph 23(jaa), or section 23FC, 121CC or 121DAB, of the Income Tax Assessment Act 1936 (as in force at any time before the commencement of section 1 of the Taxation Laws Amendment Act (No. 2) 1989) has applied in relation to any tax year;
  • a fund to which paragraph 23(ja), or section 23F or 23FB, of the Income Tax Assessment Act 1936 (as in force at any time before the commencement of paragraph (a) of the definition of superannuation fund in former subsection 27A(1) of the Income Tax Assessment Act 1936) has applied in relation to the tax year that started on 1 July 1985 or an earlier tax year;
  • a fund to which section 79 of the Income Tax Assessment Act 1936 (as in force at any time before 25 June 1984) has applied in relation to the tax year that started on 1 July 1983 or an earlier tax year.

Section 5J(1) of the VEA defines a superannuation benefit, in relation to a person, as a benefit arising directly or indirectly from amounts contributed (whether by the person or by any other person) to a superannuation fund in respect of the person.

 

 

The superannuation holding accounts reserve is the fund in which small accounts administered by the Australian Taxation Office are held.

The Department of Veterans' Affairs.