Assessing withdrawals from superannuation 108-05070020

Lump sum withdrawals from a superannuation fund are not assessed as income. Depending on what the customer uses the withdrawn amount for, further assessment may be necessary. If the withdrawn amount is used to purchase an assessable asset, the relevant income and asset assessment will apply. For example, if the money is placed in a bank account, the account balance is an asset and subject to deeming. If the withdrawn amount is spent, no further assessment is necessary.

A lump sum Total and Permanent Disability (TPD) benefit paid from a superannuation fund is not assessed as income. Any ongoing income or assets generated from a lump sum are assessable.

Note: this does not include if the lump sum is arrears of periodic payments. For assessment of a lump sum periodic arrears payment Please see: Income from personal injury insurance schemes and disability benefits

For FTB and CCS, benefits released from superannuation are generally taxable income and must be included in the customer's estimate. Service Officers should check if the customer needs to revise their current family assistance income estimate and advise choices available to help reduce the chance of an overpayment during the reconciliation process.