A person is taken to be terminally ill if two medical practitioners (at least one of these a specialist) certify the member is suffering from an illness, which in the normal course would result in death within 12 months.

The tax-free treatment applies to members of taxed and untaxed funds.  A client must satisfy a condition of release under SIS to allow the funds to be paid by the trustee.  Some clients may satisfy the taxation definition of terminal illness for the purposes of the benefit being tax free, however, will be unable to satisfy a superannuation condition of release.