Can I take a super lump sum?

Hazel wants to take a lump sum out of her super but is worried about her payments.


Q. Hazel
I am 65 years old and retirement age for me is in 12 months’ time. I am part of a couple and my husband already collects the Age Pension. I no longer work, but fulfil my obligations to Centrelink 30 hours a fortnight and collect a Newstart payment. I have a super fund and pension consolidator fund in which I stream four per cent per annum. Can I access more from my super fund in a lump sum, not to buy assets but to make our living more comfortable and affordable? Is there a restriction on how much I can take and would this affect my husband’s pension or my Newstart payment?

Also, my husband would like to go travelling for 12 months from the middle of next year. Would I need to be in Australia to apply for my Age Pension? I meet all the criteria as I have resided in Australia for the past 50 years, becoming an Australian citizen, and have worked for 40 of those 50 years.

A. Taking a one-off amount of superannuation is exempt from the income test, but what you do with the lump sum may affect you under the income or assets test. It doesn’t matter if the lump sum is exempt.

If you spend the money on an exempt asset it won’t affect you under the assets test. This includes your principal home, mortgage, or medical equipment.

If you buy a non-financial asset it will count in the assets test. This includes things such as artwork or a holiday home. If you buy or add to your financial assets Centrelink will use deeming rules to work out income from your financial assets. This applies if you use the lump sum you get to buy or add to financial assets. The deemed income counts in the income test. The assets may also count in the assets test.

Deeming rules lump sums will count in the income test if you’re:

  • putting the money in the bank
  • lending it
  • using it to buy securities or investments.


While you meet all the requirements for Age Pension eligibility next year, on the day you claim the Age Pension, generally, you must be an Australian resident and in Australia.

In this situation it is probably best to schedule your holiday around your Age Pension application.

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Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a Centrelink Financial Information Services officer, financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

Written by Ben Hocking

Ben Hocking is a skilled writer and editor with interests and expertise in politics, government, Centrelink, finance, health, retirement income, superannuation, Wordle and sports.

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