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Getting money out of super

Terminal medical condition

Section: 12.7

Since 1 July 2007 a 'terminal medical condition' exists in relation to a person at a particular time if the following circumstances exist:

  • 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 that ends not more than 12 months after the date of 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, and
  • for each of the certificates, the certification period has not ended.

For more information on the tax treatment of terminal medical condition payments.

Terminal illness condition of release frequently asked question

Question: My client is terminally ill and satisfies the 'terminal medical condition' condition of release. Is she restricted to withdrawing her super benefits as a lump sum?

Answer: No. The 'terminal medical condition' condition of release is a full condition of release that converts all of a member's benefits to unrestricted non-preserved benefits. Your client can therefore choose to take a lump sum, income stream or a combination. However, it is important to check with the trustee of the client's super fund as they may impose additional restrictions.

It is important to note that from a tax perspective, there is a difference in the tax concessions available. Lump sum super withdrawals for terminally ill members are specifically excluded from being taxed (regardless of the member's age), whereas income streams are subject to normal super income stream taxation.

Last modified: Wednesday, July 24, 2019