Under the transition to retirement rules, when you reach your preservation age, you may be able to reduce your working hours without reducing your income. You can do this by choosing to start a transition to retirement income stream (TRIS).
The TRIS payment tops up your part-time income with a regular 'income stream' from your super savings. Previously, you could only access your super once you were 65 years old or retired.
For more information on the changes to transition to retirement income streams from 1 July 2017, see GN 2019/1 – Changes to transition-to-retirement income streams.
Under these rules, you can only access your super benefits as a 'non-commutable' income stream. A non-commutable income stream is one that you can't convert into a lump sum. This generally means you can't take your benefits as a lump sum cash payment while you are still working. You must take your super benefits as regular payments.
Employers still need to make compulsory super guarantee contributions for all their eligible employees. This includes people on a TRIS.
We recommend you seek financial advice when considering:
- super withdrawal options
- how tax applies to your retirement, transition to retirement or superannuation income streams.
If a TRIS is not in the retirement phase:
- the earnings from the assets supporting the TRIS will not be eligible for exempt current pension income (ECPI), and are taxed at the relevant tax rate
- it will not count towards your transfer balance cap (until it goes into the retirement phase).
A TRIS isn't in the retirement phase until you meet one of the following conditions of release:
- you're 65 years old or older
- permanent incapacity
- terminal illness.