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Preservation Age Increasing

Whilst we have known for a number of years that the superannuation

preservation age is due to increase to age 60, the change is finally upon us.


Clients born on or after 1 July 1960 will be subject to an

increase in their preservation age. For example, a client born

on 1 July 1960 will have a preservation age of 56. This means

they will not reach their preservation age until 1 July 2016.


The preservation age increases by one year for every year that a

client’s birthday is after 1 July 1960, with those born on or after

1 July 1964 having a preservation age of 60.


See table below.


PRESERVATION AGE


Before 1 July 1960 - 55 Years of Age

From 1 July 1960 to 30 June 1961 – 56 Years of Age

From 1 July 1961 to 30 June 1962 – 57 Years of Age

From 1 July 1962 to 30 June 1963 - 58 Years of Age

From 1 July 1963 to 30 June 1964 – 59 Years of Age

On or after 1 July 1964 – 60 Years of age


The increase in preservation age impacts a number of important

superannuation strategies, including:


• Transition to retirement condition of release

• Retirement condition of release

• Severe financial hardship condition of release

• Taxation of superannuation withdrawals – low rate cap of

$185,0001 applies to withdrawals between preservation age

and 60

• Taxation of superannuation income streams – 15% tax offset

applies to income stream payments between preservation

age and age 60

• Splitting contributions – the members spouse must be

under preservation age at the time of the split or if between

preservation age and 65, must declare they do not satisfy

the retirement condition of release.

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