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Conditions of release

Conditions of release are complex and wide-ranging. Some restrict the form in which benefits can be paid (for example, as an income stream or a lump sum). These are referred to as ‘cashing restrictions’.

Where a member meets a condition of release with no cashing restrictions, the preserved and restricted non-preserved benefits will become unrestricted non-preserved benefits.

Annual benefit statements should document the preserved, restricted and unrestricted non-preserved benefits in each member account.

The Conditions of Release options offered by Mclowd are:


In accordance with recent announcements by the ATO, a new condition of release has been added to FY20 and FY21 processing: “Compassionate Grounds – COVID-19” and otherwise subject to the monetary limits specified in the relevant regulations.


Members who have reached their preservation age and have fully retired are deemed to have met the conditions of release.

Attained 65 years old

All members over the age of 65 are deemed to have met the conditions of release, whether or not they continue to work.

Attained preservation age

Members who have reached their preservation age and have chosen to Transition to Retirement are deemed to have met the conditions of release

Temporary incapacity

Members may be able to withdraw funds in some circumstances if temporarily or permanently incapacitated

Termination of employment

Members who cease employment with account balances less than $200 are permitted to withdraw their funds

Members who are temporary residents, have ceased employment, and are departing Australia permanently may be able to withdraw any balance in their superannuation account.

Terminal medical condition

Members who receive a confirmed diagnosis of a terminal medical condition may be permitted to withdraw their superannuation balance

In some circumstances, members may also be able to withdraw funds to relieve extreme financial hardship if the member has been receiving Australian Government income support payments continuously for 26 weeks and is unable to meet reasonable and immediate family living expenses. Permitted withdrawal is limited to one lump sum payment of between $1,000 and $10,0000 in any twelve-month period.

Members may also be deemed to meet conditions of release if they need funds on compassionate grounds to:

  • Pay for medical treatment for themselves or a dependant
  • Modify a home or vehicle for special needs of the member of a dependant because of a severe disability
  • Make a payment on a loan to avoid losing their home
  • Pay for expenses associated with a death, funeral or burial

When a member dies, if their account transfers to a beneficiary of their estate either under the terms of a Death Benefit Nomination or under their Will, the beneficiary is entitled to withdraw the entire balance of the account as a lump sum. If the beneficiary is a dependant, they may opt for an income stream. Otherwise the entire amount must be drawn as a lump sum.

Trustees should seek professional advice to ensure members meet conditions of release before making any payment or converting an accumulation account to a pension or transition to retirement account.