Condition of release
In order for a fund to pay a member their super benefits the member must reach their 'preservation age' and meets one of the conditions of release, such as retirement. The payment may be an income stream (also known as a super pension or annuity) or a lump sum, depending on the circumstances.
However, despite a condition of release being satisfied, the specific rules of a superannuation fund could restrict access to the superannuation benefit. Any payments made to the member that has not met a condition of release are not treated as super benefits but instead will be taxed as ordinary income at the member's marginal tax rate.
This technical resource is intended for the use of financial advisers only. It is current as at the date of publication but may be subject to change. This publication has been prepared without taking into account a potential investor's objectives, financial situation, needs or objectives. Before making a recommendation based on this material, you should consider its appropriateness based on the client's objectives, financial situation and needs. Rainmaker Group is not a registered tax agent under the Tax Agent Services Act 2009. Your client should refer to a registered tax agent before relying on information published herein that may impact their tax obligations, liabilities or entitlements.
Last modified: Tuesday, September 15, 2020