From 1 July 2015, a new regulation affecting the Income Tax Assessment Regulations 1997, Retirement Savings Account Regulations 1994 and Superannuation Industry (Supervision) Regulations 1994 (Regulations) gives terminally ill Members earlier access to their superannuation account.
Under the Regulations, a trustee of a superannuation fund is able to release the full amount of a Member’s superannuation account without restriction and on a tax free basis if they suffer a “terminal medical condition” (TMC). TMC is presently defined to exist if two registered practitioners, at least one of whom is a specialist, certify that a Member suffers from an illness or injury that is likely to result in their death within the certification period of 12 months or less.
The Tax and Superannuation Laws Amendment (Terminal Medical Conditions) Regulation 2015 extends the certification period for a TMC to 24 months.
What does this mean for you?
The amendment will make a big difference to Members with a TMC by potentially removing a hurdle for them accessing their super when they have been diagnosed with a TMC but the relevant specialist is unable to certify their death within a 12 month period.
Accordingly, it is advisable that Super Funds alert their Members to the effect of the new regulation and update their systems to ensure compliance.
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