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Nov 03, 2022

Condition of release

in SMSF Technical Forum

Hi, facts of the situation are

Member turned sixty on the 1st of May 2021, member withdrew what were previously preserved benefits on that day. Member claimed they retired prior to their sixtieth birthday and were therefore allowed to access the money. The member received an unbroken stream of employer contributions in the 12 months before and after the 60th birthday with no break of more than a few weeks between contributions.

Question is, is it correct to state that the member as they retired prior to sixty, that they needed to have retired from employment and not expected to work more than 10 hours a week in future, and this claim looks in query as the timing and value of the contributions received is in doubt.

2 answers0 replies

Comments (2)

toby

Nov 04, 2022

Hi,

I agree we need to get some further evidence from the member. What actual evidence do they have they retired when they say they did?

Toby

THE AUDITORS INSTITUTE

Nov 07, 2022

Replying to

Hi T

Yes, I agree with Toby that you need more details.

The preservation rules can be complicated.

To access benefits 3 key tests to access super by benefits going from preserved to non-preserved (i.e. met a condition of release) are:

1) Reached preservation age and have permanently retired, or

2) Between age 60 and 64 and have left an employer or permanently retired, or

3) Reached age 65.

It is possible that the member had met such a condition and the preservation status was not correctly updated at that point in time.

Normally an auditor requires the member to sign a declaration that they met a condition of release that allowed benefits to go from preserved to non-preserved when they are under 65 and have accessed lump sum benefits. The declaration should explain the condition of release that has been met.

Thanks

SMSF AAA