Superannuation is a preserved retirement savings system. In most cases, you cannot access your super until you reach "preservation age" and meet a condition of release. The rules around when and how you can withdraw — and what tax applies — depend on your age, the type of withdrawal, and whether the money comes from your taxable or tax-free component.
| Born | Preservation age |
|---|---|
| Before 1 July 1960 | 55 |
| 1 July 1960 – 30 June 1961 | 56 |
| 1 July 1961 – 30 June 1962 | 57 |
| 1 July 1962 – 30 June 1963 | 58 |
| 1 July 1963 – 30 June 1964 | 59 |
| 1 July 1964 or later | 60 |
Reaching preservation age is necessary but not always sufficient. To access your super in full, you also need to meet a "condition of release." The main conditions are: reaching age 65 (regardless of work status), reaching preservation age and retiring permanently from the workforce, reaching preservation age and starting a Transition to Retirement Income Stream (TRIS), or reaching age 60 and leaving an employer (which counts as a full condition of release for that fund's balance).
The tax treatment depends primarily on your age at the time of withdrawal.
Age 60 and over: Lump sum withdrawals and pension payments from a taxed super fund are tax-free. This applies to most Australians — almost all funds are taxed funds. This is the main tax benefit of keeping money in super to age 60.
Preservation age to age 59: Withdrawals are partially taxable. The taxable component of your super is taxed at a maximum of 15% (plus Medicare levy), which is a concessional rate compared to marginal tax rates. The tax-free component (from after-tax contributions) is not taxed. If you are between preservation age and 59 and considering a large lump sum withdrawal, the tax implications are significant — model them before withdrawing.
Under preservation age (compassionate grounds, severe financial hardship): Limited access only. Taxed at your marginal rate for amounts over the low-rate cap.
The low-rate cap for 2025-26 is $245,000 (lifetime). This is the total amount of taxable super you can withdraw between preservation age and 59 at the concessional 0% rate. Amounts above the cap are taxed at 15% (plus Medicare levy). Once you turn 60, this cap is irrelevant — everything is tax-free from a taxed fund.
In limited circumstances, you can access super before preservation age. The ATO administers compassionate release applications for: medical treatment for a life-threatening illness or injury (you and your dependants), palliative care, preventing foreclosure on your principal residence, modifying your home or vehicle for a severe disability, and funeral costs for a dependant. Applications are assessed case by case — the ATO publishes its criteria at ato.gov.au.
If you have been receiving qualifying government payments for 26 consecutive weeks and cannot meet your reasonable and immediate family living expenses, you can apply to your super fund for a severe financial hardship withdrawal of between $1,000 and $10,000 (once per 12-month period). This is a different process from compassionate grounds — it is administered by your fund, not the ATO. Tax applies at your marginal rate.
Once you reach preservation age, you can start a Transition to Retirement Income Stream (TRIS) even if you continue working full-time. A TRIS allows you to draw a minimum of 4% and maximum of 10% of your account balance as a pension each year. If you are between preservation age and 60, the pension payments are taxable at your marginal rate less a 15% tax offset. From age 60, payments from a TRIS are tax-free. TTR strategies were more advantageous before 2017 when TRIS balances earned concessional tax rates — since July 2017, TRIS balances are taxed at 15% (same as accumulation phase).
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