Hurst used the example of Fred, an employee of a related trust who runs a business and works 40 hours a week. He decides to terminate himself as an employee and pays out his leave.

“On the surface, it looks like terminating an employment arrangement, but he still runs the business, comes to work 40 hours a week and does the same things as he was doing before the ‘termination’,” Hurst said.

“In this case, you would question whether he has really met a condition release. Self-employed arrangements can make it more difficult to judge whether employment has really ceased. The same goes for those working as sole traders.”

Hurst gave another example of a 60-year-old electrician who leaves their job as an employee and triggers a condition of release but then decides to operate a sole trader business mowing lawns or gardening.

“They are operating as a sole trader which would mean there is really no cessation of employment. Primary producers and farmers are also complicated regarding the condition of ceasing employment.”

“They tend to never retire in a lot of cases, or even if they're scaling back, sometimes it's difficult to show retirement for someone staying on the land. If they're selling up and leaving the land, it's pretty clear, but if they're staying, they're going to be doing some work. Then we may have to wait until 65 for them to have full access to their super.”

Hurst said some superannuation funds can be accessed in cases where the conditions of release have not been met by using transition to retirement strategies that would allow a member to start a non-commutable income stream once they reach the preservation age of 60.

“There are minimum pension requirements for TRIS and it works the same way as a retirement pension.”

“If a TRIS is started on 1 January, the member should be able to take around two per cent if they want to take as little as possible. A lot of people don't realise that if someone does start a TRIS part way through the year, even late in the financial year, they can take up to 10 per cent out of that TRIS for that first year, even if it's only run for a short period.”

He added that if the member needs a bit more than 10 per cent and they started a TRIS in May or June, they can take out 10 per cent in that first financial year and from 1 July can take out a further 10 per cent.