PSS Terminally ill members

Contributing members

Who can apply 

You may be eligible for invalidity retirement benefits if:

• You are under the age of 60
• Your employer assists you in applying for invalidity retirement, and
• Your invalidity retirement is approved by the Commonwealth Superannuation Corporation (CSC).

You can apply if you believe you are unlikely to ever return to any form of work because of sickness or injury.

If approved, CSC will issue an Invalidity Retirement Certificate (IRC). This allows your employer to medically retire you.

If you are over the age of 60, you may apply for retirement benefits on medical grounds, and will need to provide supporting medical documentation relating to your terminal illness as outlined below.

Options for members with a terminal illness

Immediate lump sum 

If your invalidity retirement is due to a terminal illness, or your condition is so severe that you will need personal or nursing care every day within 2 years, you may choose to receive an immediate lump sum.

If you choose this option:

• The lump sum is based only on your accrued benefit
• It does not include any future service to age 60
• You must provide certificates from two medical practitioners 
  • Both must have experience with your condition (one must be a specialist in your condition)
  • At least one must not be treating you
• Your entire benefit will be paid as a lump sum
• No benefit will be payable to a spouse or eligible beneficiary after your death

Other invalidity retirement benefit options

If you retire on medical grounds (including terminal illness) and you are not a limited benefits member^, you can choose:

• A full invalidity pension, or
• An invalidity pension plus a lump sum from your member component.

Your invalidity pension is calculated as if you had continued working until age 60.

If you are a limited benefits member, your benefit can only be paid as a lump sum, calculated on your accrued benefit at the date of retirement.

^ You will be classified as a limited benefits member (LBM) if you do not complete your Confidential Medical and Personal Statement (CMAPS) within 14 days of joining PSS or it is determined that you have a medical condition that will likely prevent you from working for at least three years without taking excessive sick leave.

Tax free lump sum payments (terminal medical condition)

If you have a terminal medical condition and stop working, any lump sum component of your benefit may be paid tax free.

To qualify for tax-free treatment by the Australian Taxation Office (ATO), you must provide medical certificates from 2 medical professionals, one being a specialist in the area of your illness, both certifying that the medical condition/s you are suffering is likely to result in your death within the next 24 months. 

Invalidity retirement claim

To begin an invalidity retirement claim, you should first speak with your personnel section. 

• Your personnel section will help you complete your invalidity retirement application. 
• To meet both PSS rules and ATO requirements for tax-free treatment of any lump sums, you must provide 2 medical reports confirming your illness is likely to result in death within 24 months.
  
  • One report should be from a specialist.
  • At least one practitioner must be not treating you.

If you can’t obtain these reports, your employer may arrange an assessment with an approved medical provider.

• Once we receive your application, your dedicated case manager will fast-track it within 3 days.
• If your application is approved, you’ll need to arrange your retirement date with your employer and submit your benefit application to CSC, including how you would like to claim your benefit. Benefits will be expedited, but they can only be paid once you have ceased employment with your department.
• If you die before ceasing employment, your PSS benefit will be treated as a Death benefit.
• If you’re approved for invalidity retirement and die after ceasing employment but before submitting your benefit application, your eligible spouse may make a benefit election on your behalf, or the benefit may be paid to your estate. To ensure your benefit is paid according to your wishes, you should submit your benefit application before or shortly after finishing employment. 

For more information on the invalidity retirement process, see our PSS Claiming Invalidity benefit page.

If you would like to discuss your options or the documentation required, please contact us on 1300 000 377.

Retirement claim

If you’re over age 55, you may choose to claim your benefits on age retirement grounds. For more information about the available options, see When can I retire? If you have a terminal illness, you can access any lump sum benefits available to you as cash, even if you haven’t yet met your preservation age.

If you retire on age retirement grounds before age 60, you may also choose to take a reduced pension in exchange of higher reversionary benefits, which would be paid to your spouse or children after your death. 

Death claim

If you die while you’re still working, Death benefits will be paid to your eligible spouse and/or children. If you’re not survived by an eligible spouse or children, your benefit is usually paid to children who are not eligible for benefits, or to your estate.

• Your employer will notify us of your death and provide your next of kin’s contact details to CSC. Consider updating your contact information with your employer. 
• Your family can contact us directly on 02 6192 9521 or via our Notice of Death Digital Form.
• A dedicated case manager will support your family throughout the process. If you’re survived by an eligible spouse, they’ll be able to choose how their benefit is paid.

For more information, see Death benefit claim.

Additional Death and Invalidity Cover (ADIC)

If you have ADIC and are diagnosed with a terminal illness, you can choose to receive your benefit in line with your PSS benefit election, as either a lump sum or as a pension. 

If you die, your eligible spouse can take the benefit as either a lump sum or an indexed pension, in line with your PSS benefit option. If you die without dependants, the benefit is paid to your estate as a lump sum.

Preserved and associate members

Invalidity claim

To apply for early access to your preserved super on medical grounds, you’ll need to complete and submit the Application for approval of early access to preserved superannuation benefits on medical grounds. You’ll also need to provide 2 medical reports confirming that your illness is likely to result in your death within 24 months, with at least one report from a specialist in the relevant field. 

Your case manager will guide you through the process, and your claim will be processed within 3 days of us receiving your completed documents.

Benefit options: preserved members

If you’re a preserved member, you can choose to claim your benefit as:

• a lump sum only
• a pension only (available only if your whole benefit remains preserved in PSS)
• part pension and a lump sum of your member component (available only if your entire benefit remains preserved in PSS).

Benefit options: associate members

If you’re an associate member, you can choose to claim your benefit as:

• a lump sum only
• a pension only (available if all of your benefit remains preserved in PSS)
• part pension and a lump sum of your funded component (available only if your entire funded benefit remains preserved in PSS).

Retirement claim

If you’re over age 55, you may choose to claim your benefits on age retirement grounds. For more information about your options, see When can I retire? 

To claim any cash payments tax free, you will also need to provide 2 medical reports confirming that your illness is likely to result in your death within 24 months, with at least one report from a specialist in the relevant field.

Death claim

If you die as a preserved PSS member, Death benefits will be paid to your eligible spouse and/or children. If you’re not survived by an eligible spouse or children, your benefit is usually paid to children who are not eligible for benefits, or to your estate.

If you die while holding a PSS associate membership, your benefit will be paid to the legal personal representative of your estate. 

Your family can contact us directly on 02 6192 9521 or via the Notice of Death Digital Form. A dedicated case manager will support your family throughout the process. If you’re survived by an eligible spouse, they’ll be able to choose how their benefit is paid.

For more information, see Death benefit claim and the Death and Invalidity benefits booklet

Pensioners

Your PSS pension is payable to you for the rest of your life, and can’t generally be converted to a lump sum. In limited circumstances, you may apply to CSC to cancel your chosen pension option and elect an alternative benefit—from your date of retirement. If you’ve been diagnosed with a terminal illness and would like to discuss your pension, contact us on 1300 033 732. 

When you die, a reversionary pension will be paid to your eligible spouse and/or eligible children. If you die without an eligible spouse or child and the total pension paid to you is less than the minimum benefit payable, a final benefit may be paid to your estate. 

If you receive a PSS associate pension following a family law superannuation split, your pension will be paid for the rest of your life and will stop when you die, with no further benefits payable.

For more information, see Death benefit claim.

Your family can contact us directly on 02 6192 9521 or via the Notice of Death Digital Form. A dedicated case manager will support your family throughout the process.