Superannuation is money that is put aside and invested to allow you to enjoy a regular income stream later in life. Once a condition of release is satisfied, you are able to either take a regular income stream or take out it as a lump sum (or a combination of both). A condition of release allows a member to take money out of super provided they satisfy a condition. The main conditions available are:
- Reach preservation age and retire
- Reach preservation age and a commence transition to retirement pension
- Reach age 65
- Cease employment after age 60
- Other special circumstances such as permanent incapacity, financial hardship, compassionate grounds or terminal medical condition
The term preservation age is not the same age as your pension age. Preservation age is the age at which you can access your super if you are retired (or wish to commence a transition to retirement pension). Preservation age depends on the year you were born. It is usually age 60, however, if you were born before 1960 and up to 1964, the age varies.
If an individual has reached preservation age and wishes to reduce their work hours, but still would like to remain employed, they can start a transition to retirement income stream. This income stream supplements the lost income from the reduction in wages.
An account based income stream can be commenced on retirement or when an individual reaches aged 65. An individual is also able to access their benefits by way of a lump sum.
If you would like to discuss your eligibility to the pension or the tax applicable on assessing your super, please don’t hesitate to contact the office on 07 5437 8888.
Kristina Brown – Senior Accountant