Kept in by law
The rule that holds super in place is short. In the ATO’s words:
“It is illegal to withdraw your super unless you satisfy a condition of release.”
ATO, when you can withdraw your superThe rule follows the money if it moves. The ATO says the preservation rules still apply to benefits rolled over to another complying fund, so they can only be accessed once a condition of release is met. Money taken outside the rules can bring extra tax and penalties and cost a person their retirement savings, Moneysmart warns.
The ATO places that sentence under its heading on illegal early access schemes. For a self-managed fund, it says that where a member takes super illegally, with no condition of release met, the amount counts as that member’s assessable income, even if it is put back in the fund later.
The conditions of release the ATO lists
Under its heading on conditions of release, the ATO’s page sets out these situations.
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Turning 65
A person turns 65, even if they are still working.
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Preservation age, and retiring
A person reaches their preservation age and chooses to retire. For retirement, the ATO says the fund must be satisfied that the person has no intention of becoming employed again in the future.
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Preservation age, still working
A person reaches their preservation age, keeps working, and starts a transition to retirement income stream.
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A condition for early access
A person meets a condition that allows early access to their super. The ATO says early access is possible in very limited circumstances; they are covered in the guide to early release.
Preservation age
Preservation age is the age at which a person can access their super if they have retired or started a transition to retirement income stream. The ATO says it is not the same as pension age, and that it depends on when the person was born, which its page shows in a table.
Moneysmart gives the usual picture in plain terms: super can usually be accessed at 60 on changing employers or retiring, or at 65 whether working or not. It adds that a transition to retirement account allows some super to be taken while still working, from age 60.
The forms super can take on the way out
Moneysmart describes several kinds of account that pay super out once it can be accessed:
| Account | How it pays | What to know |
|---|---|---|
| Account-based pension | Turns a super balance into regular income, and also allows lump sums to be taken when needed | The payments stop when the balance runs out |
| Lifetime income stream | More certainty, but less flexibility in how the person is paid | Once it starts, the terms usually cannot be changed |
| Transition to retirement | Access to some super while still working, from age 60 | Linked to the preservation age condition the ATO lists for people still working |
The ATO describes a super income stream as a series of regular payments, at least once a year, drawn from a retirement account. There is a lifetime limit on how much can go into tax-free retirement accounts: the transfer balance cap. How tax treats money as it comes out is in the guide to tax on super.
Other ways money leaves the system
Temporary residents who leave Australia
A temporary resident who has left Australia, and whose visa has expired, can claim their super as a Departing Australia superannuation payment, the ATO says. Moneysmart notes that someone who worked here on a temporary visa can usually claim their super when they leave Australia.
Defined benefit accounts
Not every account works the same way. Moneysmart says defined benefit accounts are less common, open only to certain workers or closed to new members, and that defined benefit funds work differently from other super funds.
After a death
When a person dies, the ATO says, in most cases their fund pays their remaining super to their nominated beneficiary, and super paid this way is called a super death benefit.