Conditions Of Release
To be able to withdraw benefits from an SMSF, a Member must meet a condition of release. Meeting these conditions (as explained below), means that benefits can be paid under the super laws. Note that the Deed of the SMSF may impose more stringent conditions for release. However, the Deed cannot impose less stringent conditions for release because an SMSF is governed under legislation.
The most common conditions of release for paying benefits are:
Reaching Your Preservation Age and Retiring
Retirement age depends on when you were born, and when the employment plans of those who are younger than 60 are also taken into consideration. Retired Members cannot access preserved benefits until they reach preservation age .
Transition to Retirement
Members who are under 65 and have reached preservation age, but remain gainfully employed on a full-time or part-time basis, may access their benefits as a non-commutable income stream. For more information please click the button below:
Reaching Age 65
A Member who is 65 years old or older may access their benefits anytime without restrictions.
There are very limited circumstances where you may also be able to withdraw your benefits from your SMSF if you meet another conditions of release as stated by the ATO. The conditions are generally related to specific medical conditions or severe financial hardship. Please note the following conditions are more stringent and may require either confirmation from the ATO that you are
There are also some cases that allow Members early access to preserved benefits:
You may be eligible to withdraw some or all of your Super Balance on Compassionate Grounds, this includes:
- Paying for medical treatment for you or a dependent.
- Palliative care for yourself or a dependent.
- Making a payment on a loan to prevent you from losing your house.
- Modifying your home or vehicle for the special needs of you or a dependent because of a severe disability.
- Paying for expenses associated with a death, funeral or burial of a dependent.
You may apply early access of super due to compassionate grounds on the ATO page.
Severe Financial Hardship
If you have received eligible government income support payments continuously for 26 weeks and are unable to meet reasonable and immediate family living expenses, you may be able to withdraw a set amount from your Super.
When a super withdrawal due to Severe Financial Hardship is paid, it is taxed as a super lump sum payment.
The minimum amount that can be paid is $1,000 (unless your balance is less than $1,000) and the maximum amount is $10,000. You can only make one withdrawal for this condition per 12 months.
You may receive a letter from Centrelink. You can apply the letter on the Centrelink page.
Terminal Medical Condition
You may be able to access your super if you have a Terminal Medical Condition.
To qualify for this type of early access you must meet the following conditions:
- Two registered medical practitioners have certified, jointly or separately, that you suffer from an illness, or have an injury, that is likely to result in death within a period that ends no more than 24 months after the date of certification.
- At least one of the registered medical practitioners is a specialist practicing in an area related to your illness or injury.
- The certification period for each of the certificates has not ended.
You may be able to access your Super if you are temporarily unable to work or need to work less due to a physical or mental medical condition. This condition of release is generally used to release insurance benefits from a Super Fund.
If eligible you will receive the super in regular payments over the time you are unable to work. This super withdrawal will be taxed as a normal super income stream.
You may be able to access your Super if you are Permanently Incapacitated and are unable to work due to a physical or mental medical condition. This condition of release is also referred to as a disability super benefit.
To satisfy this condition you will have a permanent physical or mental medical condition that is likely to stop you from ever working again in a job you were qualified to do by education, training or experience.
When accessing your Super Benefit under this provision it must be approved by the Trustee of your SMSF (i.e. you). This can be exercised even if you are under your Preservation Age. At least two medical practitioners must certify this for you to access your Super. Be mindful the withdrawal may be taxed if you are under your Preservation Age. You may be taxed on the Taxable Portion of the amount accessed is subject to tax at around 22%.
If eligible you may be able to receive your super as either a lump sum payment or an income stream.
Temporary Residents Leaving Australia Permanently
When you leave Australia, you may be eligible to claim back the Super that has been paid by your employer as a Departing Australia Superannuation Payment (DASP). There are certain requirements that will need to be meet to claim your DASP. Please see here for more information:
Super Death Benefits (Inheriting Super)
If you believe that you are the beneficiary of a deceased person’s super or are the legal representative of a person’s estate, you should contact the Super Fund to let them know that the person has died and ask them to release the deceased person’s super.
Super Balance is Less than $200
If your employment has been terminated or you have a lost super account with AUSfund or the ATO which totals less than $200 you may be eligible to access your Super Balance. No tax is payable when accessing super accounts with a balance less than $200.
First Home Super Saver Scheme
In an effort to help more first home buyers get into the property market, the Government introduced the First Home Super Saver Scheme in the 2017 budget. From 1 July 2017, individuals can make voluntary contributions of up to $15,000 per year and $30,000 in total, to their superannuation account to purchase a first home. Please click the button for more information:
The ATO recently released a video explaining how a Member can access to their benefits in the SMSF under certain circumstances and what they should do if they meet a condition of release.
SMSF – Conditions of Release
For more info about when you can access your superannuation balance, please view the ATO guidance on Withdrawing your Super. For general guidance on the ATO rules on your SMSF, see our ATO Guidance information page.