Accessing Pensions Prior to Retirement

Since 1 July 2005, people who have reached “preservation age” can take some or all of their superannuation in the form of a non-commutable income stream without having to retire. For people born before July 1960 the preservation age is 55, scaling up to age 60 for those born after 30 June 1964.

A non-commutable income stream is a pension or annuity that cannot be cashed out as a lump sum while the person is still working. Such income streams would include popular pension products such as an allocated pension (but one that cannot be commuted to a lump sum) or a market linked pension. The pension payments are usually eligible for a 15% tax rebate.

Moreover, workers who have semi-retired on a non-commutable pension can access their capital when they are fully retired or turn 65. Alternatively if workers decide they no longer need the pension payments, they will be able to stop their pension and roll the pension capital back into superannuation to keep accumulating until retirement.