The majority of your superannuation fund will be inaccessible to you until your preservation age. The term simply put, means that the benefits of your superannuation, your funds, are preserved or withheld from you until a time that the law and/or your fund’s trust deed allows them to be paid out to you.

Your preservation age, as set out by the Australian Taxation Office, is determined by your date of birth. If you were born in the early 1960’s take careful note of your preservation age. Current preservation ages as per the ATO are set out as follows…

  • If you were born before 1st July 1960, your preservation age is 55 years old.
  • If you were born between 1st July 1960 and 30th June 1961, your preservation age is 56.
  • Born between 1st July 1961 and 30th June 1962? Your preservation age is 57.
  • What if you were born between 1st July 1962 and 30th June 1963? Then your preservation age is 58.
  • Between 1st July 1963 and 30th June 1964 your preservation age is 59.
  • Finally, if you were born after 30th June 1964, then your preservation age is set at 60 years old.

Preserved Benefits

All contributions to your superannuation fund by either yourself or on behalf of yourself made after 30th June 1999 are classed as preserved benefits. These benefits may be cashed voluntarily on the condition that the individual meets all requirements imposed by their fund. Benefits can be taken in a variety of forms, this is explained in your cashing restrictions. Contact your super fund or your financial Adviser to discuss this further if you’re considering withdrawing from your super early.

Restricted non-preserved benefits

These type of benefits can generally not be cashed. They usually originate from employment-related contributions made after 1st July 1999. If a member meets specific conditions of release, or where the employer who initially made the contributions is terminated individuals may be able to cash in these benefits.

Unrestricted non-preserved benefits

The only type of benefits that may be paid on demand are unrestricted non-preserved benefits. If a member of a super fund has previously met conditions of release and later decided to keep the money in their super fund, this would qualify as an example.

Conditions of release

It’s important to note that some conditions of release, dependant on the individual circumstances, their preservation age and the super fund’s own regulations, may restrict the form in which you can received the benefit. For example, you may have to draw out a lump sum rather than receive payment as a pension.

Although the information around superannuation and preservation age restrictions may seem daunting, don’t be overwhelmed. If you’re confused about how this applies to your situation, or you need further clarification on anything to do with your superannuation, our office is only a phone call away.

Sources:

https://www.ato.gov.au/super/self-managed-super-funds/paying-benefits/preservation-of-super/

https://www.ato.gov.au/super/self-managed-super-funds/paying-benefits/conditions-of-release/