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When you can withdraw your super

Most of the conditions of release that allow members to access their super have remained unchanged for many years (excluding COVID). However, certain areas still cause confusion and ambiguity. In this article we will review the areas that can be unclear or seem contradictory.

Reaching age 65

When a member turns 65, all benefits are accessible from that point. The member can be working full-time and there is no requirement to terminate employment. This is therefore the only retirement related condition of release that applies to a person who has never been gainfully employed.

Retirement

The definition of retirement has two options, based on a member’s age.

For a member who has reached preservation age, retirement is taken to have occurred if:

  1. an arrangement under which the member was gainfully employed has come to an end and
  2. the member has no intention of being gainfully employed on a full-time or part-time basis

From 1 July 2024 the preservation age is 60 for all members.

Alternatively, the retirement condition of release can be met if a member terminates a gainful employment arrangement at age 60 or older. There is no requirement to permanently retire, they could immediately move on to other full-time employment. Only the benefits accrued to the date of termination can be released, all future growth is preserved.

Where a member has multiple employment arrangements, terminating one of the arrangements after age 60 satisfies the retirement condition of release for all superannuation accrued to that date.

Multiple job termination – case study

Philip is age 62 and employed full-time with RBA Pty Ltd. In September 2025, he was employed as a by-election assistant and that employment terminated on 14 September 2025.

All of his superannuation accrued to 14 September 2025 can be accessed.

Gainful employment

Gainful employment is defined as being employed or self-employed for gain or reward in any business, trade, profession, vocation, calling, occupation or employment.

Employed or self-employed

Whilst ‘employed’ is not defined in superannuation law, common indicators that a person is employed are an employment contract, the receipt of salary from an employer which includes the deduction of PAYG tax, payment of superannuation guarantee contributions and entitlement to leave payments.

A person who is self-employed must generally be carrying on a business. A business includes any profession, trade, employment, vocation or calling other than an occupation performed as an employee.

Members often ask if volunteering constitutes employment, which it rarely does as there is invariably no employer/employee relationship for volunteers. Likewise, activities that are of a personal or domestic nature (such as babysitting family members) will generally not qualify.

Receipt of gain or reward

The receipt of gain or reward in respect of gainful employment requires the gain or reward to be in return for personal exertion. The gain or reward may include receipt of remuneration such as salary or wages, business income, bonuses or commissions.

The receipt of passive income (for example from an investment portfolio or rental income) will not constitute gain or reward from gainful employment.

Termination of employment required – not merely a change

The retirement conditions of release require that an arrangement under which the member was gainfully employed has come to an end. This requires the arrangement to have terminated, rather than merely changed, even if the change is significant.

This is a particularly important concept as members regularly don’t appreciate the technical importance of the termination – in their mind they have retired or are working minimal hours and therefore believe they have met a retirement condition of release.

Members regularly intend to fully retire however they are encouraged by their employer to remain on the books and fulfil casual or relief roles or work in an ongoing part-time capacity. If this occurs, the employment arrangement may not have terminated and therefore a retirement condition of release is not met. If this is the case, the payment will constitute illegal early access. The amount would be included in the member’s personal income and taxed at their marginal tax rate, plus personal tax penalties.

Termination – case study

Joel worked full-time for 30 years with Big Company Pty Ltd. Joel retired at age 60 and commenced taking all their accrued leave. Prior to the accrued leave expiring they were convinced to accept a casual role with Big Company, working one day per week. Although Joel’s hours have changed dramatically, there was no termination of employment with Big Company Pty Ltd, meaning a retirement condition of release has not been met.

Permanently retired

Permanently retired requires the member to never intend to be gainfully employed on a part-time or full-time basis. Part-time employment is defined as being gainfully employed for at least 10 hours, and less than 30 hours, each week. Full-time employment is defined as being gainfully employed for at least 30 hours each week.

When considering the permanent retirement after preservation age condition of release, the termination of employment can have occurred at any time in the past.

Members often ask what happens if they genuinely intended to permanently retire but return to the workforce after they have accessed their super or started a retirement phase pension. Provided that the intention to permanently retire was genuine and not a contrived arrangement, there is no requirement for the unrestricted benefits to return to a preserved status. However, any future contributions and investment returns in accumulation phase will be preserved.

Permanently retired – case study

Cain is 60 when in August 2023 when he agrees with his employer Medium Company Pty Ltd that he will reduce his working hours to one day per week (7.5 hours). Cain does not terminate his employment with Medium Company Pty Ltd. However, over his working life he has terminated employment with various employers. Cain meets the retirement condition of release as he has reached his preservation age, has terminated a gainful employment arrangement in the past and does not intend to be gainfully employed for 10 hours or more in the future.

Conclusion

Understanding the technical requirements for meeting the retirement conditions of release can ensure members are eligible to access their super. The superannuation definitions of retirement will differ from many members’ plain English understanding of retirement.

 

Julie Steed is a Senior Technical Services Manager at MLC TechConnect. This article provides general information only and does not consider the circumstances of any individual.

 

  •   15 October 2025
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12 Comments
Dudley
October 19, 2025


"transfer assets from SMSF name into their personal name":

If have Account Based Accumulation and Disbursement ('pension') Accounts (not antiquated 'pension(s)');

Note in bank transfer reference "From Accum to 'Me'" and / or "From Pension to 'Me'" so that withdrawal will be accounted correctly in SMSF accounts.

1
Julie Steed
October 20, 2025

Hi Charles,
Provided that the SMSF’s trust deed permits, either of the methods you mention may be used. A withdrawal benefit may be made by selling down assets and making a cash payment or by making in-specie payments of the assets held in the SMSF. A combination of both may also potentially be used.
Pension payments must be made in cash, they can’t be made by in-specie transfer of assets, however lump sum commutations from a pension can be made in-specie.

If the benefit is paid via in-specie transfer of assets, the ownership must be changed from the trustee of the SMSF to the individual. For shares this will require the completion of standard transfer forms. For other assets, various legal processes will be required.

The trust deed may also provide notification requirements for a member requesting the payment of their benefit and/or the trustees acceptance of the request. Documenting the member’s request for a payment, including payment instructions would be consistent with good record keeping practices.
Regards
Julie

1
Dudley
October 20, 2025


"transfer assets from SMSF name into their personal name":

See if Google AI will help you. Ask short, focused, grammatically clear questions:

Q:
'Capital gains tax payable on in-specie withdrawal from an SMSF'

A:
'An in-specie withdrawal from an SMSF is considered a capital gains tax (CGT) event for the fund. The CGT payable depends on whether the SMSF is in the accumulation or retirement phase. If the fund is in the accumulation phase, capital gains are taxed at a concessional rate (15% on the full gain, or 10% on two-thirds if held for more than 12 months), while the tax is disregarded if the fund is entirely in the retirement phase for the entire financial year. ... '

1
anthony
October 19, 2025

what if you receive a redundancy of sat $150000 at age 60 and decide to tretire same year? Can you contribute this to your super even if you have accrued the $30000 employer contribution for the year?

2
Julie Steed
October 20, 2025

Hi Anthony,
A personal deductible contribution above the annual cap (currently $30,000) can be made if a person is eligible to use the 5 year catch-up concessional contributions. This requires that the person has a total super balance at the previous 30 June of less than $500,000 and has not used their full annual cap in the previous five years.
I have attached a link to a previous Firstlinks article that covers the topic and provides information on determining an individual’s eligibility for the 5 year catch-up - https://www.firstlinks.com.au/clock-ticking-super-free-kick
Regards
Julie

Steve
October 17, 2025

What if you permanently retire at or before age 60 knowing that at some point in the future (age 67-74), you have the intention of picking up some form of "unrelated" employment in order to satisfy the work test - i.e. so as to be eligible to make a concessional contribution? Does that intention at the time of termination taint the outcome?

Peter
October 17, 2025

No

Julie Steed
October 20, 2025

Hi Steve,
In this instance, a person would be relying on the 'permanent retirement from the workforce' retirement condition of release. This requires that the person has previously terminated an employment arrangement, is now age 60 or over and has no intention of ever being gainfully employed on a full-time or part-time basis in the future. For this purpose, part-time is defined as 10 hours a week or more.
So technically, if a person knew that they intended to work in the future for more than 10 hours a week they wouldn't meet this limb of the retirement definition.
If the person was employed after age 60 and then terminated that employment arrangement, they would then be able to satisfy the 'termination of employment after age 60' retirement condition of release. For this limb of the retirement definition there is no requirement to have no intention of being gainfully employed in the future.

Michael
October 21, 2025

I'm 62 ,self employed , sole trader . My business is service based and quite physical. Starting to feel the effects with a few aches and pains. I have around 100 regular clients which ideally I would like to reduce to about half that, however, that wouldn't provide me with enough income. I wouldn't meet a condition of release to access my Super so I guess my choices are to battle on to 65 or stop all together, unfortunately.

Julie Steed
October 21, 2025

Hi Michael,
Unfortunately you are correct, reducing your workload, even substantially won't generally qualify as permanent retirement unless you reduce your working hours to less than 10 hours per week. You would also need to have terminated an employment arrangement at some time in the past.
The only other retirement option is if you had another employment arrangement which terminated in the future. As you are over 60, the termination of the other employment arrangement would be a condition of release.
Regards
Julie

Dudley
October 22, 2025


"62" ... "I wouldn't meet a condition of release to access my Super":

Google knows:
Q:
'How much can be withdrawn from super during transition to retirement at age 62?'
A:
'At age 62, you can withdraw up to 10% of your account balance per financial year from a Transition to Retirement Income Stream (TRIS). The minimum withdrawal is 4% of your account balance, but you can choose to withdraw any amount between these two figures. You cannot take a lump sum from a TRIS unless you meet a different condition of release, such as full retirement. '

 

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