Retirement
The 7 reasons you can access your superannuation early
Following the government’s early access to super scheme closing, the ATO is reminding Australians of the sevens ways they can still access their superannuation early.
The 7 reasons you can access your superannuation early
Following the government’s early access to super scheme closing, the ATO is reminding Australians of the sevens ways they can still access their superannuation early.
Under the government’s temporary early access to super scheme, individuals and sole traders who had suffered financial hardship of at least 20 percent due to loss of work or hours were enabled access to up to $10,000 from their superannuation retirement savings in the 2019-2020 financial year.
A second round of the scheme, from 1 July to 31 December, permitted people to apply to withdraw a further $10,000.
Overall, 3.46 million people withdrew $36.4 billion from super funds to help with everyday payments such as mortgages, credit cards, electricity bills, healthcare costs and car payments, receiving an average of $7,638.
However, with the scheme now closed, the ATO has revealed that there are still certain circumstances under which Aussies can tap into their superannuation. These include:
Access on compassionate grounds
You may be allowed to withdraw some of your super on compassionate grounds. Compassionate grounds include needing money to pay for:
- medical treatment and medical transport for you or your dependant
- palliative care for you or your dependant
- making a payment on a home loan or council rates so you don’t lose your home
- accommodating a disability for you or your dependant
- expenses associated with the death, funeral or burial of your dependant.
Access due to severe financial hardship
Severe financial hardship is not administered by the ATO. You need to contact your super provider to request access to your super due to severe financial hardship.
You may be able to withdraw some of your super if you meet both these conditions:
- You have received eligible government income support payments continuously for 26 weeks.
- You are not able to meet reasonable and immediate family living expenses.
If you withdraw super due to severe financial hardship, it is taxed as a super lump sum.
The minimum amount that can be withdrawn is $1,000 and the maximum amount is $10,000. If your super balance is less than $1,000 you can withdraw up to your remaining balance after tax.
You can only make one withdrawal in any 12-month period.
Access due to a terminal medical condition
You may be able to access your super if you have a terminal medical condition.
A terminal medical condition exists if all these conditions are met:
- Two registered medical practitioners have certified, jointly or separately, that you suffer 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 practising in an area related to your illness or injury.
- The 24-month certification period has not ended.
Access due to temporary incapacity
You may be able to access your super if you are temporarily unable to work, or need to work less hours, because of a physical or mental medical condition.
This condition of release is generally used to access insurance benefits linked to your super account.
You will receive the super in regular payments over the time you are unable to work. A super withdrawal due to temporary incapacity is taxed as a super income stream.
Access due to permanent incapacity
You may be able to access your super if you are permanently incapacitated. This type of super withdrawal is sometimes called a “disability super benefit”.
Your 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 can receive the super as either a lump sum or as regular payments (income stream).
A super withdrawal due to permanent incapacity is subject to different tax components. For you to receive concessional tax treatment, your permanent incapacity must be certified by at least two medical practitioners.
Contact your provider to request access to your super because of permanent incapacity.
To work out how your super payment will be taxed, you need to know how much of the money in your super account is a:
- tax-free component
- taxable component the super provider has paid tax on (taxed element)
- taxable component the super provider has not paid tax on (untaxed element).
Super 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.
First Home Super Saver scheme
To help you save for your first home, you can apply to release voluntary concessional (before-tax) and voluntary non-concessional (after-tax) contributions you have made to your super fund since 1 July 2017.
You must meet the eligibility requirements to apply for the release of these amounts.
You can apply to have a maximum of $15,000 of your voluntary contributions from any one financial year included in your eligible contributions to be released under the FHSS scheme, up to a total of $30,000 contributions across all years. You will also receive an amount of earnings that relate to those contributions.
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