• Access due to temporary incapacity

    You may be able to access your super if you are temporarily unable to work or need to work less hours because of a physical or mental medical condition.

    You will receive the super in regular payments (an income stream) over the time you are unable to work.

    How to apply

    Contact your super fund to request access to your super due to temporary incapacity.

    How tax applies

    There are no special tax rates for a super withdrawal due to temporary incapacity.

    See also:

    Access due to permanent incapacity

    You may be able to access your super if you are permanently incapacitated. This type of super withdrawal is sometimes called a 'disability super benefit'.

    You have a permanent incapacity if the trustee is satisfied you have a physical or mental medical condition likely to stop you from ever working again in a job you're qualified to do by education, training or experience. At least two medical practitioners must certify this for you to receive concessional tax treatment.

    You can receive the super as either a:

    How to apply

    Contact your super fund to request access to your super because you have a permanent incapacity.

    How tax applies

    To work out how your super payment will be taxed you need to know how much of the money in your super account is a:

    • tax-free component
    • taxable component the fund has paid tax on (the 'taxed element' )
    • taxable component the fund has not paid tax on (the 'untaxed element').

    If you're under your preservation age and receive a disability super benefit as an income stream, you will get tax offsets that reduce your tax rate by 15% on the taxed element of the taxable component you get.

    If you have reached your preservation age or if you get a lump sum, your disability benefit will be taxed at the rates described in How tax applies to your super.

    See also:

    Example

    Jenny is 45 years old and has a permanent incapacity. She receives an income stream from her super as an annual payment.

    On 29 August 2014, she receives $30,000. Her super fund tells her it is entirely taxable component that was taxed in the fund.

    Jenny includes the $30,000 as assessable income on her tax return. She claims tax offsets that result in her paying the following effective rates of tax:

    Type of super

    Effective tax rate (including Medicare levy)

    Taxable component – taxed element: $30,000

    Her marginal tax rate less 15% tax offset

     

    End of example
      Last modified: 01 Sep 2016QC 37785