06/05/2015 – Although the changes were legislated a while ago (June 1998), the increase in the preservation age for superannuation may start to affect Australian expats on or after the 1st of July 2015. The table outlines what your preservation age will be based on your date of birth. (Click the image to view a larger size)
The preservation age is relevant to the conditions of release that relate to your super fund as well as the withholding tax rates and your eligibility to split contributions. The list below outlines the different ways that you can access super once you have reached the preservation age:
- Retirement – you can access your super if you permanently retire
- Transition to Retirement – you can access your super to commence a transition to retirement income stream
- Severe Financial Hardship – you can access your super on the grounds of financial hardship if you satisfy one of two tests, one of which requires you to have reached your preservation age plus 39 weeks.
The preservation age also impacts the withholding tax on lump sum and income payments received from your superannuation before the age of 60 (after which all payments are tax free). A higher tax rate is generally payable on the taxable component of payments received by a member before you have reached your preservation age. For more information on the tax treatment of superannuation payments please see the ATO website.
When it comes to contribution splitting you can apply to split certain contributions with your spouse at any age, but your spouse must be either:
- less than the preservation age that applies to you, or
- aged between your preservation age and 65 years, and not retired.