Can I Access My Super?

Superannuation is essentially your retirement fund, meaning any access to your superannuation before your retirement will affect your super balance and future retirement income.

There are several ways you can access your superannuation early if you meet strict eligibility criteria. These include: If you are suffering severe financial hardship; on compassionate grounds; temporary or permanent Incapacity; total permanent disability; if you terminate gainful employment with less than $200 in your super account; OR if you’re in financial difficulties due to COVID-19 (coronavirus)

Australians experiencing severe financial hardship due to the impact of the coronavirus on their livelihood can access up to $10,000 of their super before 30 June 2020 and a further $10,000 after 1 July 2020. This is a temporary measure and special conditions apply.

 

Access due to COVID-19 (coronavirus)

You can apply for early release of your super if you are unemployed and eligible to receive a JobSeeker payment, Youth Allowance for job seekers, parenting payment (including the single and partnered payments), special benefit or farm household allowance. If you have had a change in circumstances as a result of COVID-19 such as losing your job or having a reduction in employment, you may be able to access your funds early.

You can also apply if, on or after 1 January 2020; you; were made redundant; your working hours were reduced by 20 per cent or more; you are a sole trader and your business was suspended; OR your turnover has reduced by 20 per cent or more.

Funds released from your super fund:

  • Will not be taxed
  • Will not affect Centrelink or Department of Veterans’ Affairs (DVA) payments
  • Can be applied for online through the MyGov website
  • Will be handled by the Australian Tax Office (ATO). If approved, the ATO will notify your super fund to release the payment.

Access due to severe financial hardship (non-COVID-19)

You may be able to access some of your super if you meet both these criteria:

  • You have been on Centrelink income for at least 26 weeks (six months) non-stop. You can contact Services Australia to request a letter confirming this to send with your release application.
  • You can satisfy your superannuation fund that the money is needed to meet ‘reasonable immediate family living expenses’. This includes things like rent, loans, bills, car repairs and the cost of medical treatment.

Under normal circumstances (not special COVID-19 measures) you can make one withdrawal of up to $10,000 per year. These withdrawals are taxed between 17 per cent and 22 per cent if you are aged under 60. If your super balance is less than $1,000 you can withdraw up to your remaining balance after tax.

 

Access on compassionate grounds

If you meet strict eligibility conditions and your super fund allows it, you may be able to withdraw funds on compassionate grounds. If you’re approved, the amount is paid and taxed as a lump sum.

Compassionate grounds include needing money to pay for:

  • Medical treatment and medical transport for you or your dependent
  • Making a payment on a home loan or council rates so you don’t lose your home
  • Modifying your home or vehicle or buying disability aids to cater for the severe disability of you or your dependent
  • Palliative care for you or your dependent
  • Expenses associated with the death, funeral or burial of your dependent.

For access due to a terminal medical condition, the following must be met:

  • You are suffering from an illness or injury that is likely to result in death within 24 months of the date of signing the certificate
  • At least one of the registered medical practitioners is a specialist practicing in an area related to your illness or injury.
  • The 24-month certification period has not ended.

 

Access due to permanent incapacity

This type of super access may be called a ‘disability super benefit’ or referred to as ‘Total Permanent Disability (TDP)’. Your super fund must be satisfied that you have a permanent physical or mental medical condition that is likely to stop you from ever working again in a job you were qualified to do by education, training or experience. You will likely have to provide your super fund with supporting documentation from your treating doctors, and your super fund may request you see one of their chosen specialists.

You may wish to consult a Superannuation legal advocate for specialist legal advice if claiming under permanent incapacity.

If you find that you don’t qualify for permanent incapacity or TPD, ask your fund if you are eligible for a Temporary Incapacity Benefit.

 

Super balance less than $200.

You may be able to access your super if:

  • Your employment is terminated and the balance of your super account is less than $200
  • You have found a ‘lost super’ account with a balance less than $200.

Contact your provider to request access. Check the eligibility criteria for withdrawing super from ATO-held accounts. No tax is payable when accessing super accounts with a balance less than $200.

Access to superannuation takes time and can be quite a difficult process. An Anglicare Victoria financial counsellor can assist you to liaise with your fund and/or negotiate with any creditors while you wait for a decision. You may need to speak with a superannuation legal advocate for specialist legal advice for Permanent Incapacity claims.

 

The pros and cons of accessing your super early

Just because you can access your superannuation early does not mean it is the best option for you. A financial counsellor can help you assess your situation, identify alternative options, and discuss the consequences, pros and cons that accessing your superannuation may have in your individual circumstances.

PROS

  • You will have access to funds which may relieve your immediate financial burden.

CONS

  • You will lose an asset that is protected in bankruptcy and otherwise protected from creditors until you take it out of the fund.
  • The money may be taxed by the Australian Tax Office on release
  • If you use all of your super, you may lose your insurance benefits (e.g. income protection, death or total and permanent disability) that you may not have known you had. If your severe financial hardship is because of a permanent incapacity to work you may be losing valuable benefits.
  • It may not solve your financial problem and you will have less available for retirement.
  • It may take too long. It can take months to get your super released, if at all. If you do not provide all of the correct information your application may be sent back to you and you will be sent to the back of the queue. If you are relying solely on early release of super your financial circumstances may get worse while you are waiting.
  • It may result in you having to:
    – Pay more tax
    – Pay more child support
    – Accept lower Centrelink payments
    – Receive less child support.