News 26th April 2023

Objective of super

Many Australians would agree that the purpose of their superannuation is to provide income/benefits for themselves and their dependents in retirement. However, the government wants to take this one step further and legislate the objective of superannuation.

What is the proposed objective? 

The government recently announced it plans on legislating an objective for superannuation. The proposed objective put forward is: 

“the objective of superannuation is to preserve savings, to deliver income for a dignified retirement, alongside Government support, in an equitable and sustainable way”.

Why do we need an objective? 

The government believes an objective will provide stability and confidence to the policy makers, regulators, industry, and the community, that changes to superannuation policy will be aligned with the purpose of the system. In other words, legislating an objective should help to protect superannuation from political interference in future.

The government also stated that many individuals have accessed their benefits early to pay for discretionary items, such as cosmetic medical procedures, and therefore having a legislated objective will ensure superannuation will be restricted to a person’s retirement only. 

But will an objective stop future changes to super?

Although the objective of superannuation is about preserving your superannuation until retirement, the proposed objective would not in any way be binding on current or future policy makers / governments.

In fact, shortly after stating it wants to legislate an objective of superannuation, the government also announced it will introduce an additional tax of 15% on earnings for individuals whose total superannuation balances exceed $3m at the end of a financial year (as explained in our earlier article). As can be seen, an objective will not stop the current or future government from tinkering with the system.

What about the sole purpose test?

The sole purpose test is an important rule within superannuation law and is divided into core and ancillary purposes, where a fund must be maintained for either:

  • One or more core purposes, or
  • One or more core purposes and one or more ancillary purposes.

Essentially, the “core purposes” are to provide benefits on or after the member’s retirement, reaching age 65 or death. It also means that fund trustees must make decisions that are in the best retirement interests of their members, not their current interests (or those of related parties).

The ancillary purposes provide benefits on the cessation of work due to ill health, and other benefits as the regulator approves in writing, such as financial hardship and/or on compassionate grounds.

However, this last ancillary purpose is the provision that may enable superannuation to be accessed early, such as under the COVID-19 early release scheme.

As the sole purpose test already exists, it could be revisited to place further limitations on the preservation and condition of release rules to ensure there is a more targeted measure that stops access to early access schemes. 

Where to from here?

The government is currently consulting with the community on the objective of superannuation. Remember, superannuation is for retirement but it also available to access for ancillary purposes, such as permanent incapacity, temporary incapacity, severe financial hardship, and compassionate grounds.

Email us at if you would like to know more about the proposed objective of superannuation and what it may mean for you.