Superannuation Preservation Age: When Can You Access Your Super?

Superannuation is designed to provide income in retirement, which is why your super is generally locked away until you reach a certain age and meet specific conditions. Understanding when and how you can access your super is essential for retirement planning and for knowing what options exist in genuine hardship situations. This guide explains the preservation rules that govern access to your superannuation savings.

What is Preservation Age?

Preservation age is the minimum age at which you can access your superannuation savings, provided you also meet a condition of release. Your preservation age depends on when you were born, with those born before 1 July 1960 having a preservation age of 55, and those born after 30 June 1964 having a preservation age of 60. For those born between these dates, preservation age ranges from 56 to 59 depending on your specific birth year.

The preservation age schedule is as follows: if you were born before 1 July 1960, your preservation age is 55. If born between 1 July 1960 and 30 June 1961, it is 56. For those born between 1 July 1961 and 30 June 1962, it is 57. Between 1 July 1962 and 30 June 1963, it is 58. Between 1 July 1963 and 30 June 1964, it is 59. Anyone born after 30 June 1964 has a preservation age of 60.

Conditions of Release

Reaching preservation age alone does not automatically unlock your super. You must also meet a condition of release, which determines how much of your super you can access and whether any restrictions apply. The most common conditions of release are retirement, reaching age 65, and commencing a transition to retirement income stream.

Retirement means permanently leaving the workforce with no intention to return to gainful employment for 10 or more hours per week. If you have reached preservation age and retired, you have unrestricted access to all your superannuation savings. You can withdraw lump sums, commence an account-based pension, or a combination of both.

Reaching age 65 provides unrestricted access to your super regardless of whether you have retired. Even if you are still working at 65, you can access all your super without restriction. This age-based access provides certainty for those who continue working beyond traditional retirement age.

Transition to Retirement

Once you reach preservation age but before retiring, you can access your super through a transition to retirement (TTR) income stream while continuing to work. This arrangement allows you to supplement reduced work hours with super income, or to implement contribution strategies while still employed.

However, TTR access has important restrictions. You can only receive payments as an income stream, not as lump sum withdrawals. There are minimum and maximum annual payment limits, with the maximum generally being 10 per cent of your TTR account balance. You cannot access the capital in your TTR account until you fully retire or reach age 65.

TTR arrangements can facilitate a gradual transition from full-time work to retirement, allowing you to reduce work hours while maintaining income levels. They can also be used for tax-effective salary sacrifice strategies, though changes in 2017 reduced some of the tax benefits previously available through TTR.

Early Access in Special Circumstances

While super is generally preserved until preservation age, several conditions allow earlier access in specific circumstances. These early release provisions are designed for genuine hardship situations and are not intended as a general savings mechanism.

Severe financial hardship may allow early access if you have been receiving government income support payments for at least 26 continuous weeks and are unable to meet reasonable and immediate family living expenses. In these circumstances, you may be able to access a lump sum between $1,000 and $10,000 once in any 12-month period. Your super fund will require evidence of hardship and government payment receipt.

Compassionate grounds can allow early access for specific expenses including medical treatment for you or a dependant that is not available through the public system, modifications to your home or vehicle due to severe disability, palliative care, expenses associated with a dependant's death or funeral, and preventing foreclosure or forced sale of your home. Applications on compassionate grounds are assessed by the ATO, not your super fund.

Terminal Medical Condition

If you have a terminal medical condition, you can access all of your super as a tax-free lump sum regardless of your age. To qualify, two registered medical practitioners must certify that you suffer from an illness or injury that is likely to result in your death within 24 months of the date of certification, and at least one of those practitioners must be a specialist in the relevant area.

This provision ensures that those facing terminal illness can access their retirement savings when they most need financial resources, without the restrictions that would otherwise apply to preserved super.

Permanent Incapacity

If you become permanently incapacitated and are unlikely ever to work again, you can access your super at any age. Permanent incapacity generally means physical or mental ill-health that results in you being unlikely to ever engage in gainful employment for which you are reasonably qualified by education, training, or experience.

Your super fund's trustee must be reasonably satisfied of your permanent incapacity based on medical evidence before releasing your benefits. The definition of incapacity can vary between funds, particularly for insurance purposes, so check your fund's specific terms.

Temporary Resident Departing Australia

Temporary residents who permanently leave Australia and whose visa has expired or been cancelled can claim their super as a Departing Australia Superannuation Payment (DASP). This provision ensures that temporary workers who will never retire in Australia can access their accumulated super upon departure.

DASP payments are subject to withholding tax at rates that depend on the tax components of your super and the taxed or untaxed status of your fund's contributions. The tax rates are generally higher than those applying to Australian residents, reflecting the concessional tax treatment the contributions received during your time in Australia.

First Home Super Saver Scheme

While not strictly early access to existing super, the First Home Super Saver Scheme (FHSS) allows first home buyers to withdraw voluntary contributions and associated earnings for a home deposit. You can withdraw up to $15,000 of contributions from any one financial year and $50,000 in total, plus associated earnings.

The scheme allows first home buyers to save for a deposit in the tax-effective superannuation environment, then withdraw those specific contributions for their home purchase. This is not early access to employer contributions or existing super savings, but rather a mechanism for tax-effective deposit saving.

Illegal Early Access Schemes

Be aware that illegal early access schemes exist, often promoted by unscrupulous operators who offer to help you access your super early for a fee. These schemes typically involve providing false information to super funds or the ATO and can result in significant penalties, loss of super savings to fees and charges, and potential criminal prosecution.

Legitimate early access only occurs through the channels described above. If anyone offers to help you access your super early outside these conditions, treat it as a serious warning sign. The ATO actively investigates illegal early access schemes and takes enforcement action against both promoters and participants.

Planning Around Preservation

Understanding preservation rules allows better financial planning for the transition to retirement. If you plan to retire before age 65, you need other income sources to cover the gap between ceasing work and accessing super, unless you meet the retirement condition of release at preservation age.

Consider how your non-super savings, any employment during transition, and potential Age Pension entitlements will work together with your super access timeline. Use our superannuation calculator to project your super balance at different ages and plan your retirement finances accordingly.

Conclusion

Superannuation preservation exists to ensure your retirement savings are available when you need them most, during retirement. While this means you cannot generally access your super before preservation age, understanding the conditions of release helps you plan for when and how you will access your savings. For those facing genuine hardship or special circumstances, provisions exist for early access, though these should be carefully considered given the long-term impact on retirement income.