What is a terminal medical condition
A terminal medical condition exists if all these conditions are met:
- Two registered medical practitioners have certified, jointly or separately, that the person suffers from an illness or an injury that is likely to result in the death of the person within 24 months of 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.
- The 24 month certification period from the date of the certifications (see point 1 above) has not ended.
These rules do not apply to Departing Australia superannuation payments (DASP).
Note that you can apply for early release on compassionate grounds (under different rules) to pay for certain medical expenses including medical treatment, medical transport and palliative care.
Accessing your super
You can ask your super fund 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 fund.
If you satisfy this condition of release, any benefits that have accrued up to that point become unrestricted non-preserved benefits. Any additional benefits you accrue during the 24 month 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 of release. You should speak to your super fund about what new certification may be required.
When you receive a tax-free super lump sum payment:
- your provider doesn't have to give you a payment summary
- you don't need to include the amount on your tax return
If you're thinking about rolling over your super to another fund or have already made a rollover request, make sure you complete the rollover before applying to access your super due to a terminal medical condition. If you don't do this, there may be adverse tax consequences. For more information see Transferring or consolidating your super.
Note that you can apply for early release on compassionate grounds (under different rules) to pay for certain medical treatments, medical transport and palliative care expenses.
How tax applies
A payment from your provider will be made as a tax-free super lump sum payment as long as your super is in a complying super plan or annuity scheme.
For the payment to be tax-free you must have a terminal medical condition either:
- at the time of the payment
- within 90 days of receiving the payment.
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.
Access to ATO-held super
If you're suffering from a terminal medical condition and you have super held by us you can either:
- ask your provider to claim this on your behalf
- claim it directly from us yourself.
To apply online, sign in to your myGov accountExternal Link linked to ATO online services. From the ATO online services home page, select:
- Super
- then Manage
- then Withdraw ATO-held super.
Alternatively you can download the paper form Application for payment of ATO-held superannuation money.
How tax applies
Any amount claimed directly from us during a period of certification is treated as a tax-free lump sum.
Proof of your condition
We'll 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 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 proof was provided within the certification period.
Once the certification period on your terminal medical condition has expired, if more super has accrued in your account you can claim this directly from us. You must provide new proof of a terminal medical condition that will start another 24 month certification period.
Refund of tax paid on super
If you received a lump sum super payment before you knew you had a terminal medical condition, you may be eligible for a refund of the tax you paid on the lump sum.
You need to give your super fund the required medical certification stating that you had a terminal medical condition either:
- at the time of the payment
- within 90 days of receiving the payment.
If you're requesting the refund before the end of the financial year in which the payment was made, you should request the refund from your super fund. If it's in the following financial year you should request the refund from us.
In your request provide:
- a copy of your medical certification (certified by 2 medical practitioners)
- the payment summary from your fund
- your bank account details (if you want us to pay your refund directly into your account).
If your fund refuses to refund the tax paid you can apply to us. You'll need to provide evidence your fund has refused to refund the tax.
Send your application to us by:
- fax to 1300 669 756
- mail to
Australian Taxation Office
PO BOX 3100
PENRITH NSW 2740