General Provisions for Assessing Withdrawals of Superannuation Benefits

Principles for assessing withdrawals from superannuation assets

The income and assets test assessments of a withdrawal from superannuation assets depends on:

• whether the superannuation assets are in the accumulation phase or draw down phase, and
• the pensioner's age.

Income and assets assessment of withdrawals in the drawdown phase

A withdrawal made during the drawdown phase is considered to be a commutation. Commutations are assessed under the income streams rules.    

Assets test assessment of withdrawals in the accumulation phase

The assets test assessment of a withdrawal from a superannuation fund depends on how the amount withdrawn is used. For example, if invested in bank account it becomes a financial asset, if used to pay the mortgage of the principal home it becomes exempt. If the person has not reached preservation age, withdrawal is allowed only on financial hardship or compassionate grounds. It is likely in these cases that there will be no impact as the amount withdrawn would likely be spent on living expenses or similar.

Income test assessment of withdrawals in the accumulation phase

Withdrawals from superannuation in the accumulation phase are not assessed as income.