Superannuation 108-05070000

Overseas superannuation investments do not meet the definition of a superannuation fund in Section 9(1) of the Social Security Act. Consequently overseas superannuation investments are treated as overseas managed investments for social security purposes.

Following retirement from the workforce, a person is able to access their superannuation and can either make lump sum withdrawals from their superannuation fund or receive regular ongoing payments from an income stream product. This is known as the draw down phase. Where superannuation assets are used to purchase or to commence an income stream, it is assessed under the income stream rules.

Note: regular withdrawals from a superannuation fund do not constitute an income stream.

A person can also move from retirement (draw down phase) back into employment (accumulation phase).

Since the introduction of the Superannuation Guarantee legislation, all employees must have superannuation contributed on their behalf by their employer; therefore most customers who have been recently employed should have some superannuation investment. There are a range of superannuation investments customers may have and are not to be confused with income stream products like annuities and superannuation pensions. See the Guide to Social Security Law, 4.8.2.10, Principles for Assessing Superannuation Investments for more information. The References page contains a link to this.

Generally, accrued superannuation benefits are not accessible until the fund member leaves the workforce and reaches preservation age. However, the superannuation trustee does permit early release of preserved superannuation benefits in limited circumstances.

From 28 December 2002, new laws allowed the Family Court, or parties to a property settlement, the power to split superannuation. The laws also gave the Court the power to 'flag' a superannuation interest for future splitting. Note: this is not to be confused with income stream payment splits. All Means Test assessments of 'split' income stream payments are currently undertaken by the Department of Social Services (DSS). The Service Officer must forward a copy of the supporting documentation to the Financial Industry and Network Support (FINS) Helpdesk.

Most splits of superannuation investments will involve customers under Age Pension age, and as Australian superannuation in the accumulation phase or in the draw down phase where an income stream has not commenced is exempt for under Age Pension age customers, splits should have no effect on income support entitlements. Where a superannuation investment is split for customers who are of Age Pension age, the customers changed superannuation details must be updated in the usual manner.

For assessment under the Income and Asset Test, the procedure, Assessing superannuation contains further information.