Simpler process for accessing your super early (on compassionate grounds)
Need early access to your super on compassionate grounds? From 1 November 2011, new procedures are in effect to make the road to receiving super before retirement quicker and easier for those experiencing undue hardship. Read on to learn how.
Although superannuation is designed to be preserved until retirement so Australians can have the best possible chance at living a dignified retirement, there are some very specific circumstances where you can legally access your superannuation savings early.
Previously, the Australian Prudential Regulation Authority (APRA) was responsible for administering the limited circumstances where superannuation would be released on certain compassionate grounds.
Now, to simplify and streamline the process and ease the burden on those Australians experiencing undue hardship because of their personal circumstances, the Government has announced that the Department of Human Services (Medicare) will be responsible for all administration of early release of superannuation on compassionate grounds.
It is expected that due to Medicare’s experience in managing electronic business transactions and their heightened focus on customer service and support, the transfer will allow the claims process to be simpler and more cost-effective.
Medicare had been undertaking the administration function under delegation from APRA on a temporary basis since early 2011, but this function has now been transferred permanently. The criteria for early release of superannuation on compassionate grounds remains the same.
Compassionate grounds include expenses resulting from:
- Medical treatment
- Medical transport
- Mortgage assistance
- Modifications to your home and/or motor vehicle needed due to a severe disability
- Funeral assistance
- Care for terminal medical condition
For more information on the above circumstances, visit the Department of Human Services website.
According to Government figures, more than $1.5 million was released in compassionate payments in the 2010-11 financial year, with an average amount of $11,316 released per claim.
If you’re thinking about making an application, make sure you check with your super fund or RSA provider first to make sure they will actually be able to take action on any release approval issued by Medicare. Even though you may meet a condition of release determined by Medicare, the release of your super savings continues to be subject to the governing rules of the fund you’re in.
If you think you may qualify for early release of superannuation on other grounds such as financial hardship or terminal illness, you should contact your superannuation fund for more information on how to apply.
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