A terminal medical condition is a condition of release that allows you to access your entire super balance early — regardless of your age — and pay no tax on the withdrawal. The key requirements are two medical certificates and a certified life expectancy of 24 months or less.
Who Qualifies?
You meet the terminal medical condition condition of release if all of the following apply:
- Two registered medical practitioners have certified that you have a terminal illness or injury that is likely to result in your death within 24 months
- At least one of the two practitioners is a specialist in an area related to the illness or injury
- The certification period has not expired (certificates are valid for 24 months from the date of certification)
Both certificates must be current and must specifically address the 24-month life expectancy.
Tax Treatment — Tax-Free Regardless of Age
This is a significant benefit of the terminal medical condition condition: the entire super benefit is tax-free, regardless of your age, the components of your super balance, or the size of the withdrawal.
Normal super access rules apply a tax rate of 20% on the taxable component for those under preservation age (60). Under the terminal medical condition condition of release, this tax is completely waived.
| Standard Access (Under 60) | Terminal Medical Condition Access | |
|---|---|---|
| Age requirement | Preservation age (60) | None — any age |
| Tax on taxable component | Up to 20% + Medicare levy | Nil |
| Tax on tax-free component | Nil | Nil |
| Insurance payments triggered? | No | Often yes — check TPD/Terminal Illness cover |
How to Apply
Applications for terminal medical condition access are made directly to your super fund.
Step 1 — Obtain the two medical certificates
Ask your treating physician (your GP or specialist) to complete the first certificate. Obtain a second from a registered specialist in the relevant field. Your super fund may have its own pro forma certificate — it’s worth asking before arranging the certificates, as funds often require specific wording.
Step 2 — Apply to your fund
Submit the two certificates to your fund along with:
- A completed withdrawal application form (available from your fund)
- Identification documents (passport or driver’s licence)
- Bank account details for the payment
Step 3 — ATO notification (for some funds)
Your fund may need to notify the ATO before processing the payment for some types of accounts. This is handled by the fund — you do not need to contact the ATO separately.
Step 4 — Receive payment
Your fund will process the payment and transfer the full balance to your nominated bank account. No tax is withheld.
Insurance Within Super — Check for Terminal Illness Cover
Many super funds include life insurance and total and permanent disability (TPD) insurance as default or opt-in cover. Some funds also include terminal illness insurance as a separate benefit or as part of the life cover.
If your fund’s insurance includes terminal illness cover (typically defined as a 12 or 24-month life expectancy), you may also be able to make a claim on that insurance in addition to accessing your super balance.
Check your fund’s Product Disclosure Statement (PDS) or insurance policy document to understand your cover. Terminal illness insurance claims are processed separately from your super withdrawal.
Super Death Benefit Nominations — Update If Needed
If you access your super under the terminal medical condition condition, your super balance is paid to you directly (not as a death benefit). However, if you pass away before processing the application or while it’s being assessed, the funds would be paid as a death benefit — subject to your nomination.
Ensure your binding death benefit nomination is current and reflects your wishes. Non-binding nominations are at the fund trustee’s discretion. See your fund’s guidance on nomination types.
What Happens to Remaining Super After the Withdrawal?
Once you withdraw your super under the terminal medical condition condition, the balance goes to you personally. You are free to:
- Keep the money in a bank account
- Gift or donate it
- Use it for medical treatment or personal care costs
- Leave it to your estate (via your will)
There is no requirement to spend it in any particular way.
Impact on the Age Pension and Centrelink
A large super withdrawal creates a cash holding — which counts as a financial asset in the Centrelink income and assets test. If you or your partner receive Age Pension or Centrelink payments, the withdrawn amount may reduce those payments.
However, given the severity of a terminal diagnosis, financial planning in this situation is very individual. If you are receiving Centrelink support and need to understand the implications, Services Australia (Centrelink) has a social worker service available for people facing serious illness — contact Services Australia on 132 300.
Frequently Asked Questions
Can I access super if my doctor says I have less than 12 months, not 24? The legislative threshold is 24 months. If your life expectancy is 12 months, you still qualify under the terminal medical condition condition — 12 months is within the 24-month window. The condition requires a prognosis of death within 24 months, not exactly 24 months.
What if my condition improves and I live longer than 24 months? If your condition improves and you outlive the 24-month certification period, the certificates expire. If you have already accessed your super, you are not required to return the money. However, you cannot use expired certificates to claim further super — you would need to meet a different condition of release.
My certificates are from two GPs — does that count? No. The legislation requires at least one of the two certifying practitioners to be a registered specialist in an area related to the illness or injury (e.g. an oncologist for cancer, a cardiologist for a cardiac condition). A GP alone is not a specialist for this purpose.
Can I access super for a family member with a terminal illness? No — the terminal medical condition condition of release applies to the super member personally. A family member with a terminal illness does not give you access to your own super. However, you may be able to make a compassionate grounds application if the family member is your dependant and you need funds for their medical treatment or palliative care.
Is there a minimum balance I must leave in super? No. You can withdraw the entire balance — there is no requirement to leave a minimum amount.
See also: Accessing Your Super. For advice tailored to your situation, speak with a licensed financial adviser. You can find one through the ASIC financial advisers register or MoneySmart.