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Retirement

Super may alleviate financial stress for bushfire and drought victims

By Sarah Kendell · January 06 2020
Reading:
egg

Retirement

Super may alleviate financial stress for bushfire and drought victims

By Sarah Kendell
January 06 2020
Reading:
egg
Financial stress for bushfire and drought victims

Super may alleviate financial stress for bushfire and drought victims

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By Sarah Kendell · January 06 2020
Reading:
egg
Financial stress for bushfire and drought victims

Regional and rural Australians could look at using super assets in some cases to help with any financial hardship being experienced as a result of the current bushfire and drought crises, according to an SMSF administrator.

Practical Systems Super SMSF specialist Bob Locke told nestegg sister title SMSF Adviser that the group had seen a rising incidence of queries from clients around whether it was possible for assets within their SMSF to be used to assist with living expenses as a result of the drought or property destruction due to bushfire damage.

Mr Locke said that while there were strict rules around the use of such assets prior to retirement age, if rural clients could prove severe financial hardship, it could be possible to access a portion of super to supplement any emergency payments being received.

“Super legislation recognises that there can be legitimate situations where release of monies before the intended time may be appropriate,” he said.

“These include compassionate grounds to cover items such as medical expenses, home modifications to cater for disability and housing loan payments to prevent foreclosure; severe financial hardship for amounts up to $10,000 in any year; [and] transition to retirement, provided the person has reached their preservation age.

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“As an example, farmers who may have been receiving the Farm Household Allowance benefit for at least six months may qualify for severe financial hardship.”

Mr Locke said depending on the age of a client, commencing a transition to retirement pension could also be an appropriate strategy to help rural clients through the drought season, as they could look at making additional contributions back to their super after drought conditions had passed.

“Another example may be older farmers who are cash-strapped due to ongoing fodder costs in maintaining breeding stock,” he said.

“One option for them might be to instigate a transition to retirement payment from their fund to temporarily assist with living expenses until the drought breaks. The intention would be to top up their super balances once conditions return to normal.”

Super may alleviate financial stress for bushfire and drought victims
Financial stress for bushfire and drought victims
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About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

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