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Accessing super in tough times

Can I access my super early?

Although superannuation is designed to be preserved until retirement, there are some very specific circumstances where you can legally access your superannuation savings early.

COVID-19 (coronavirus)

If you are experiencing financial difficulties as a result of the coronavirus (COVID-19) crisis, you may be eligible to apply for early access to your superannuation.

People impacted by the coronavirus pandemic were able to access up to $10,000 of their super in the 2019-20 financial year (up to 30 June 2020). If you are an Australian or New Zealand citizens or permanent resident, you may also be able to access up to a further $10,000 between 1 July and 31 December 2020. Any money you withdraw will be tax free and will not affect any of your Centrelink or Veterans’ Affairs payments.

Am I eligible?

You are eligible for early access to your super if you need the money to help you deal with the adverse economic impacts of the coronavirus and:

  • you are unemployed; or
  • you are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or
  • on or after 1 January 2020:
    • you were made redundant; or
    • your working hours were reduced by 20 per cent or more; or
    • if you are a sole trader – your business was suspended or there was a reduction in your turnover of 20 per cent or more.

If you are a temporary resident of Australia:

  • different eligibility rules apply, and
  • you were only able to make one withdrawal under these rules, before 1 July.

Should I withdraw my super early?

Withdrawing some of your super early is a big financial decision that you shouldn’t make lightly. It could leave you with less money for your retirement and impact your insurance within super. So before applying, stop and think about the potential consequences of accessing your superannuation early.

You could retire with less money – ASFA estimates that a person aged 30 who withdraws a full $20,000 from their superannuation would have around $60,000 less when they reach retirement. This is a conservative estimate and you may actually lose more or less than this depending on your personal circumstances, such as your age, how many years left until you retire, and the level of your ongoing super contributions.

Your insurance may be cancelled – If you have insurance in your super account, you may lose it after making an early withdrawal if the balance becomes too low or if the withdrawal leads to the closure of your account. See COVID-19 early release may impact insurance for more detail.

If you’re unsure about the implications of accessing your super early, you should contact your superannuation fund or seek professional financial advice.

How do I apply?

Applications can be made through the MyGov website, Applications cannot be made after 31 December 2020.

Compassionate grounds

The Australian Taxation Office (ATO) is responsible for the administration of early release of superannuation on compassionate grounds. 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 ATO website.

If you’re thinking about making an application, make sure you check with your super fund or Retirement Savings Account (RSA) provider first to make sure they will actually be able to take action on any release approval issued by the DHS. Even though you may meet a condition of release determined by the DHS, the release of your super savings continues to be subject to the governing rules of the fund you’re in.

Financial hardship

Early release of superannuation on the grounds of severe financial hardship is administered by your super fund or RSA. You may be eligible if you’ve been receiving a Commonwealth income support payment from Centrelink, and can prove you are unable to meet reasonable and immediate family living expenses. The maximum amount that can be released to you in any 12 month period is $10,000. Different criteria apply to those aged over 55 and 39 weeks. For more information, contact your super fund.

Terminal illness or permanent incapacity

Early release of superannuation on the grounds of terminal illness or permanent incapacity is administered by your super fund or RSA. If you meet certain conditions and are able to provide proof of your condition, you may be able to have your super released prior to retirement. Contact your super fund for more information or to make an application.

Leaving Australia

You may also be eligible to access your super before retirement if you are leaving Australia permanently. If you are an overseas resident working temporarily in Australia, you may be paid your superannuation money once you have left Australia through what is known as a departing Australia superannuation payment (DASP). For more information or to apply, visit the ATO website.