Retirement
Government extends early access to super scheme
Australians looking to access their superannuation early have been given an extra three months as the government extends the cut-off.
Government extends early access to super scheme
Australians looking to access their superannuation early have been given an extra three months as the government extends the cut-off.
Members will now be able to access up to $10,000 if they have suffered financial hardships due to the COVID-19 pandemic until 30 December.
When the scheme was first introduced, members who have been impacted financially by COVID-19 were allowed to withdraw $10,000 from their superannuation in the 2019-2020 financial year, and an additional $10,000 in the 2020-2021 financial year, until 24 September 2020.
Figures released earlier by the Australian Prudential Regulation Authority (APRA) have shown that 2.8 million Australians have withdrawn $28 billion from their pension fund.
While early access to super has always been a feature for those experiencing severe financial hardship or accessing on compassionate grounds, the COVID-19 measure allowed individuals to apply as long as they experienced a reduction of working hours by 20 per cent or more.
The average payment made since inception sits at $7,718, and rises to $8,755 when considering repeat applications only.
The rules remain on the extension, with members accessing their superannuation will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink and Veterans’ Affairs payments, or the JobKeeper payment.
The ATO has since warned that it will take a closer look at applications to ensure the integrity of the scheme is upheld.
Who is eligible for the scheme
Eligibility to superannuation has not changed. Here are the ATO’s criteria for early access to superannuation:
To be eligible, a citizen or permanent resident of Australia and New Zealand must require the COVID-19 early release of super to assist them to deal with the adverse economic effects of COVID-19.
In addition, one of the following circumstances must apply:
- You are unemployed
- You are eligible to receive one of the following: JobSeeker Payment, Youth Allowance for jobseekers (unless you are undertaking full-time study or are a new apprentice) Parenting Payment (which includes the single and partnered payments), Special Benefit Farm Household Allowance
On or after 1 January 2020, either:
- You were made redundant
- Your working hours were reduced by 20 per cent or more (including to zero)
- You were a sole trader and your business was suspended or there was a reduction in turnover of 20 per cent or more (partners in a partnership are not eligible unless the partner satisfies any other of the eligibility)
Assessing your eligibility
You do not need to attach evidence to support your application. However, you should keep records and documents to confirm your eligibility as the ATO may ask you for this information. Examples of evidence to confirm eligibility may include your:
- payslips
- letters, emails or rosters from your employer
- bank statements
- business cash flow and turnover records
- website or other public notice confirming your business closed
- documents confirming eligibility for relevant government allowances or benefits (above)
- separation certificate
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