All Superannuation Conditions of Release: Age, Hardship, TTR

Australian super is locked away until you meet one of the superannuation conditions of release set out in the Superannuation Industry (Supervision) Regulations 1994. The common pathway is reaching your preservation age and retiring, but the law recognises more than a dozen other triggers, including turning 65, severe financial hardship, specific compassionate expenses, terminal illness, permanent or temporary incapacity, the First Home Super Saver scheme, leaving Australia on a temporary visa, and death. Each condition has its own test, its own evidence requirements, and often its own tax treatment.

Retirement at Preservation Age

Preservation age is 60 for anyone born on or after 1 July 1964, which covers most people now planning retirement. Earlier birth years have slightly lower preservation ages on a sliding scale, but the youngest band (born 1 July 1963 to 30 June 1964) is already at 59, and everyone older has passed through.¹

Reaching preservation age alone does not unlock your balance. You also need to have retired from gainful employment before the fund can release your full preserved benefits as a lump sum or an income stream.¹

A separate condition applies when you leave a job after turning 60. Ending an employment arrangement at age 60 or older satisfies a condition of release for the benefits linked to that period of employment, even if you are not retiring in the broader sense. You could start a new job the following week and still access those specific benefits.²

Turning 65

Once you reach 65, all preserved benefits become unrestricted whether you are still working or not. You can withdraw the entire balance as a lump sum, start an income stream, or leave the money in the fund. No retirement test applies.²

Transition to Retirement

If you have reached preservation age but want to keep working, a Transition to Retirement Income Stream (TRIS) lets you draw on super without fully retiring. The fund pays you an income stream each financial year, capped at 10% of the account balance with a 4% minimum.³

A TRIS is non-commutable until you satisfy an unrestricted condition of release, meaning you cannot convert it to a lump sum or roll it into another product while the restrictions remain. People commonly use a TRIS to top up take-home pay while reducing hours, or to salary-sacrifice extra contributions to offset what they withdraw, which can produce a tax advantage for members 60 and over.

Severe Financial Hardship

Early access on hardship grounds is tightly controlled, and two pathways apply depending on your age.

If you are under preservation age plus 39 weeks, you must show that you have been receiving eligible government income support payments continuously for at least 26 weeks and cannot meet reasonable and immediate living expenses for your family. The fund can then release a single lump sum of between $1,000 and $10,000 (or your remaining balance if it is below $1,000). Only one hardship payment is allowed in any 12-month period.⁴

If you have reached preservation age plus 39 weeks, the test changes. You need to have received government income support for a cumulative total of 39 weeks since reaching preservation age and must not be working full-time or part-time when you apply. Under this pathway, there is no cap on the amount released.²

Hardship applications go directly to your super fund, not the ATO. If the fund asks for proof that you have been receiving income support, Services Australia can issue a letter confirming the payment period.⁴

Compassionate Grounds

Compassionate ground applications are administered by the ATO, not the fund. You can only apply for a specific unpaid expense (or one you borrowed to cover), and you must show you have no other way to pay. The ATO considers whether you could use savings, redraw a mortgage, sell investments, or access support such as the NDIS before approving a release.⁵

Six categories of expense are eligible:

Medical treatment for you or a dependant where the treatment addresses a life-threatening condition, acute or chronic pain, or acute or chronic mental illness and is not readily available through the public health system.
Medical transport to attend eligible treatment, including flights, ambulance, fuel, tolls, and parking. Only the most cost-efficient reasonable option is approved, meaning economy flights unless a doctor certifies a medical need for a higher class.
Home or vehicle modifications to accommodate special needs arising from a severe disability affecting you or a dependant.
Palliative care for you or a dependant with a terminal illness.
Death, funeral, or burial expenses for a dependant.
Payments needed to stop a mortgagee from forcing the sale of your home.

⁵

The amount released is limited to what is reasonably needed for the expense. You will need itemised quotes no more than six months old or invoices no more than 30 days old. For medical-related claims, reports from at least two medical practitioners are required, one of whom must be a specialist in the relevant field. Reports must be signed and dated within six months of your application.⁶

You must also be or have been an Australian citizen, permanent resident, or New Zealand citizen. Applications for a dependant’s expense need documentary evidence of the relationship.⁵

Terminal Medical Condition

If you have a terminal illness or injury, your full super balance can be released as a tax-free lump sum. Two registered medical practitioners must certify, jointly or separately, that the condition is likely to result in death within 24 months. At least one must be a specialist practising in the area related to your condition.⁷

The tax-free treatment has a timing requirement. You must have the terminal condition at the time the payment is made or within 90 days after receiving it. Benefits that accrue during the 24-month certification period also become unrestricted, but any balance remaining after the certification period expires may not be tax-free if withdrawn later.⁷

Permanent Incapacity

Your fund trustee can release the entire balance if they are reasonably satisfied that a physical or mental health condition makes it unlikely you will ever work again in a role you are qualified for by education, training, or experience. The bar is high. Trustees typically require detailed medical evidence and may use their own medical panels before making a determination.⁸

A tax benefit comes with a permanent incapacity payment. A portion of the lump sum is reclassified as a tax-free component using a formula that accounts for the years of service you have lost: the number of days between the date you became unable to work and the day you would have turned 65, divided by that figure plus your service period. The longer your remaining working life would have been, the larger your tax-free component.⁹

Temporary Incapacity

Where an illness or injury forces you to stop working temporarily but does not amount to permanent incapacity, the fund may pay benefits from its insured or voluntary employer-funded component. Temporary incapacity payments are generally structured as income replacement while you are unable to work, rather than a lump sum withdrawal of your account balance. They come through the fund’s insurance arrangements rather than from your accumulated savings.²

First Home Super Saver Scheme

The FHSS scheme creates a condition of release for first home buyers. You can make voluntary contributions and later withdraw them, plus deemed earnings, toward a home deposit. The cap is $15,000 in any single financial year and $50,000 across all years combined.¹⁰

Eligibility requires that you are at least 18 when you request a determination, have never owned property in Australia (including investment property, vacant land, or commercial property), and intend to have your name on the title of the property you buy. You do not need to be an Australian citizen or tax resident. If you previously owned property but lost it through circumstances such as bankruptcy, divorce, illness, or natural disaster, the ATO may still allow you to apply under a financial hardship exception.¹⁰

The released amount comprises 100% of your eligible non-concessional (after-tax) contributions and 85% of your concessional (before-tax) contributions, plus associated earnings calculated by the ATO.

Leaving Australia as a Temporary Resident

Temporary residents who accumulated super while working in Australia can claim a Departing Australia Superannuation Payment (DASP) after leaving. Your temporary visa must have expired or been cancelled, you must have left Australia, you must not hold any other active Australian visa, and you must not be an Australian citizen, New Zealand citizen, or permanent resident.¹¹

You can apply online through the ATO’s DASP system at no charge. The system automatically verifies your immigration status with the Department of Home Affairs. Paper applications are also available using form NAT 7204 for super held by a fund, or NAT 74880 for super held by the ATO. For balances of $5,000 or more, paper applications to a super fund may require a Certification of Immigration Status along with certified proof of identity.¹¹

Claiming a DASP does not affect future visa applications. If you later return to Australia permanently, you may be able to transfer the money back into an Australian super fund.

Death Benefits

When a fund member dies, their remaining super becomes payable as a death benefit. If the member made a binding nomination, the fund must follow it. If the nomination was non-binding or none was made, the trustee uses its discretion to decide which dependants receive the benefit, or pays it to the deceased’s legal personal representative for distribution through the estate.¹²

Under super law, a dependant includes a spouse or de facto partner, any child of the deceased regardless of age, or someone in an interdependency relationship with the deceased. Dependants can receive the death benefit as a lump sum or an income stream. If the benefit goes to a non-dependant, it must be paid as a lump sum. Anyone wanting their super to go to someone outside these categories should make a binding nomination directing payment to their legal personal representative, so it passes through their will.¹²

Where to Apply

Where you lodge depends on the type of release:

Retirement, financial hardship, permanent incapacity, and temporary incapacity: apply to your super fund through its member portal or contact centre.
Compassionate grounds: apply to the ATO first. If approved, the ATO issues a determination letter that you give to your fund, which processes the payment.¹³
Terminal medical condition: apply to either the ATO or your fund, depending on which holds the money.
FHSS: request a determination from the ATO through myGov linked to ATO online services.
DASP: apply through the ATO’s DASP online system after leaving Australia.¹¹

Straightforward retirement withdrawals often settle within a few business days. Compassionate ground applications take longer because the ATO must assess the claim before the fund can act. Delays in supplying evidence are the most common reason applications stall.

Tax on Super Withdrawals

The tax you pay depends mainly on your age and the type of release. If you withdraw from a taxed super fund at 60 or older, the payment is generally tax-free.¹⁴

Withdrawals before age 60 are different. For the 2025–26 income year, withholding rates on lump sum payments are 22% of the entire taxed element (including the Medicare levy) if you are under preservation age, and 32% of the untaxed element up to the untaxed plan cap of $1,865,000, rising to 47% above the cap.¹⁵

Hardship and compassionate ground payments follow the same lump sum tax rules. There is no special concessional rate for hardship, and compassionate ground payments are taxed as normal super lump sums.⁴

Terminal medical condition payments are the exception. They are tax-free as long as you have the terminal condition at the time of payment or within 90 days of receiving it.⁷

Illegal Early Access

Schemes that promise early super access outside the legal conditions of release are a persistent problem. If you withdraw super without satisfying a legitimate condition, the full amount is added to your taxable income for that year. You will owe the resulting income tax plus shortfall penalties and interest. You cannot return illegally accessed money to your fund; any attempt is treated as a new contribution subject to the usual caps.¹⁶

If you provided false documents to obtain the release, separate penalties for false and misleading statements apply on top. You also cannot claim a tax deduction for any fees or commissions charged by a promoter who helped arrange the illegal access.¹⁶

Consequences are steeper for the people running these schemes. Promoters who facilitate illegal early release face civil and criminal penalties of up to 2,400 penalty units under the Superannuation Industry (Supervision) Act 1993, and the Federal Court can issue injunctions to shut down their operations.¹⁷

Self-managed super fund trustees who release benefits to a member without a valid condition of release risk administrative penalties and disqualification as a trustee, which is recorded on a public register.

1
Social Security Guide. 1.1.P.377 Preservation Age
2
Australian Taxation Office. Conditions of Release
3
Australian Taxation Office. Transition to Retirement Income Streams
4
Australian Taxation Office. When You Can Access Your Super Early
5
Australian Taxation Office. Access on Compassionate Grounds – What You Need to Know
6
Australian Taxation Office. Expenses Eligible for Release on Compassionate Grounds
7
Australian Taxation Office. Access Due to a Terminal Medical Condition
8
Australian Taxation Office. ATO ID 2009/109 – Superannuation – Disability Superannuation Benefit
9
Australian Taxation Office. Calculating Components of a Super Benefit
10
Australian Taxation Office. First Home Super Saver Scheme
11
Australian Taxation Office. Departing Australia Superannuation Payment (DASP)
12
Australian Taxation Office. Superannuation Death Benefits
13
Australian Taxation Office. Access on Compassionate Grounds
14
Australian Taxation Office. Accessing Your Super to Retire
15
Australian Taxation Office. Schedule 12 Tax Table for Superannuation Lump Sums
16
Australian Taxation Office. Illegal Early Access to Super
17
Australian Taxation Office. Promoter Penalty Laws