The income and assets test assessments of a withdrawal from superannuation assets depends on:
A withdrawal made during the drawdown phase is considered to be a commutation. Commutations are assessed under the income streams rules.
More → [3]
The assets test [2] assessment of a withdrawal from a superannuation fund [2] depends on how the amount withdrawn is used. For example, if invested in bank account it becomes a financial asset [2], if used to pay the mortgage of the principal home [2] 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 It is likely in these cases that there will be no impact as the amount withdrawn would likely be spent on living expenses or similar.
Withdrawals from superannuation in the accumulation phase are not assessed as income.
The accumulation phase is the period during a person's working life in which superannuation contributions are paid into a superannuation fund, with the aim of maximising the sum available for retirement through investment and tax concessions.
The draw down phase is the period, after retirement from the workforce, when a person receives regular payments of superannuation benefits from their superannuation fund or an income stream product.
One element of the means test for income support pensions whereby the rate of pension payable to a pensioner reduces progressively as their assets increase above a certain threshold known as the assets value limit (AVL). [6]
A superannuation fund is defined in the VEA as being:
According to section 5J(1) [8] of the VEA a financial asset means;
The principal home has the meaning given by subsection 5LA(1) [8] of the VEA and subsection 5LA(2) [8] of the VEA. The principal home of a person is generally the place in which they reside. In certain circumstances, however, the principal home of a person can be the place in which they formerly resided. The following property is regarded as part of the principal home.
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16535%23comment-form
[2] https://clik.dva.gov.au/%23
[3] https://clik.dva.gov.au/book/export/html/16535#tgt-cspol_part10_ftn598
[4] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/105-income-streams/1053-general-provisions-assessing-income-streams/additional-rules-regarding-commutation
[5] https://clik.dva.gov.au/book/export/html/16535#ref-cspol_part10_ftn598
[6] http://clik.dva.gov.au/glossary/assets-value-limit-avl
[7] http://clik.dva.gov.au/glossary/foreign-superannuation-fund
[8] http://clik.dva.gov.au/legislation-library