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  • Access due to a terminal medical condition

    You may be able to access your super if you have a terminal medical condition.

    A terminal medical condition exists if:

    • two registered medical practitioners have certified, jointly or separately, that the person suffers from an illness, or has incurred an injury, that is likely to result in the death of the person within a period (the certification period) that ends not more than 24 months after the date of the certification
    • at least one of the registered medical practitioners is a specialist practising in an area related to the illness or injury suffered by the person
    • for each of the certificates, the certification period has not ended.

    Note: Departing Australia Superannuation Payment (DASP) are exempt.

    Access to super held by your provider

    You can ask your provider to release your super benefits if you have a terminal medical condition. There are no set limits on the amount you can withdraw from your super. However, payments are subject to the rules of your provider.

    If you satisfy this condition of release, any benefits that have accrued up to that point become unrestricted non-preserved. Any additional benefits you accrue during the certification period also become unrestricted non-preserved benefits. These can be accessed as a tax-free lump sum payment if you withdraw it within 24 months of certification.

    Any balances remaining after the certification period ends can be accessed at any time, but may not be tax-free.

    Any benefits that accrue after the certification period are not covered by the original 'terminal medical condition' condition of release. You should speak to your provider about what new certification may be required.

    Your provider does not have to give you a payment summary when they make a tax-free super lump sum payment and you don't need to include the amount on your tax return.

    How tax applies

    A payment from your provider due to a terminal medical illness will be made as a super lump sum payment.

    These payments are non-assessable non-exempt income (that is, tax-free), as long as your super is within a complying super provider or an annuity provider.

    A complying super plan is either a:

    • complying super fund
    • public sector super scheme that is either  
      • a regulated super fund
      • an exempt public sector super scheme
       
    • complying approved deposit fund
    • retirement savings account.

    To be tax free you must have a terminal medical condition either:

    • at the time of the payment or
    • within 90 days of receiving the payment.

    Access to super held by us

    If you are suffering from a terminal medical condition and you have a super credit balance being held by us, you can either ask your provider to claim this on your behalf, or you can claim it directly from us yourself.

    How tax applies

    Any amount claimed directly from us during a period of certification is treated as non-assessable non-exempt income (that is, a tax-free lump sum).

    Prior to 1 April 2018, if you claimed a direct payment from us under a different condition of release, you may still have informed us of your terminal medical condition in order to receive withholding tax concessions on the balance you were claiming.

    Note: Departing Australia Superannuation Payment (DASP) are exempt.

    See also:

    Supporting documentation

    We will only ask for you to prove your terminal medical condition once during a period of certification. If you have previously informed us of a terminal medical condition and from 1 April 2018 would like to claim your super credit balance in a lump sum direct payment, you will not be asked to reprove your condition, as long as it was provided within the certification period.

    Once the certification period on your terminal medical condition has expired, if you subsequently have a super credit balance accrued with us and would like to claim this directly, you must provide new proof of a terminal medical condition that will re-start the certification period.

    For more information refer to what is a terminal medical condition for certification requirements to prove a terminal medical condition.

    Refund of tax paid on super you received before you knew you had a terminal medical condition

    You may be eligible to receive a refund of the amount of tax withheld provided you had a terminal medical condition before the payment was made by your super provider.

    You should provide your provider with the required medical certification stating that at the time of the payment, or within 90 days of receiving the payment, you had a terminal medical condition.

    If you're requesting the refund before the end of the financial year in which the earlier super payment was made, you should request the refund from your provider.

    If the financial year in which you received the payment has ended, you should apply to us for the refund. We will require:

    • a copy of your medical certification (certified by two medical practitioners)
    • the payment summary from your provider
    • your bank account details (if you want us to pay your refund directly into your account).

    You can also apply to us for a refund of the tax paid if your provider refuses to pay the refund. You will need to provide evidence your provider has refused to refund the tax they withheld from the payment.

    Send your application to us by:

    • fax to 1300 669 756
    • mail to

      Australian Taxation Office
      PO BOX 3100
      PENRITH  NSW  2740
      Last modified: 29 Aug 2019QC 60034