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CGT – Buying a new home before selling the old
February 9, 2026Most people think of superannuation as money
they can’t touch until retirement, but there are important exceptions. One
significant exception is the permanent incapacity condition of release, which
can allow people who are totally and permanently disabled to access their super
earlier.
Understanding how this works can make a real
difference at a time when income, medical costs, and financial security are
often under pressure.
What is permanent incapacity?
Under superannuation law, permanent incapacity
generally means that, because of physical or mental ill-health, you are
unlikely to ever work again in a job for which you are reasonably qualified by
education, training, or experience.
To meet this condition of release, your super
fund usually requires certification from two medical practitioners confirming
that your condition is permanent and prevents you from returning to suitable
employment.
Once this condition is satisfied, your super
can be released to you, even if you are well below preservation age.
You can access super even without insurance
A common misconception is that you can only
receive money from super if your fund held Total and Permanent Disability (TPD)
insurance. That’s not the case.
Even if your super fund did not have any
insurance cover at all, you may still be able to access:
●
Your existing super balance
●
Employer contributions
●
Personal contributions and
earnings
The permanent incapacity condition of release
applies to your super savings themselves, not just to insurance payouts. This
can be especially important for individuals who changed jobs frequently, had
low balances, or opted out of insurance.
In other words, the absence of insurance does
not prevent access to super if you meet the permanent incapacity rules.
How the money can be paid
Once approved, the released super can usually
be taken as:
●
A lump sum – which may assist with
large expenses like paying off the mortgage
●
An income stream which may assist
with meeting ongoing living expenses
Tax treatment may vary depending on your age
and the components of your super, but in most cases, part of the benefit will
be taxed concessionally compared to regular income.
It is important to get advice about your
options and any tax implications before payment.
The role of TPD insurance in super
While insurance is not required to access
super under permanent incapacity, TPD insurance held inside super can provide
significant additional support.
If your fund includes TPD cover and your claim
is accepted, the insurance benefit is paid into your super account. This can
substantially increase the amount available to you, often at a time when
earning an income is no longer possible.
Some key benefits of TPD insurance in super
include:
●
Premiums are generally deductible
to the fund and this benefit is passed on to the member
●
Premiums are paid from super, not
your take-home pay meaning it won’t impact your cashflow
●
You may not have to deplete super
savings otherwise set aside for retirement
Final thoughts
The permanent incapacity condition of release
from super exists to provide financial support when it’s needed most. If you
are totally and permanently disabled, superannuation is not locked away
indefinitely and can be accessed to help you manage life after work.
Whether or not insurance is involved,
understanding your options can ease financial stress and give you more control
during a difficult time. If you think you may qualify, speak to us to help
guide you through your next step with confidence.

