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:
- an arrangement under which the member was gainfully employed has come to an end and
- 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.