While superannuation is intended to be accessed only in retirement, you can secure early release of your superannuation (before retirement age) in certain circumstances.
Firstly, you can apply to your super fund for early release of super if you are suffering 'sever financial hardship' (as defined in legislation) if you satisfy one of the following two scenarios:
- you have received Commonwealth income support (Centrelink) for a continuous 26 weeks, and you cannot meet your reasonable and immediate family expenses. In this case, you can access up to $10,000 in each 12-month period, and you must take a minimum of $1,000. If your balance is less than $1,000, then you must withdraw all of your super balance.
- you have reached your preservation age (age 55 for those born before July 1960, and at least age 56 for those born on or after 1 July 1960) and received Commonwealth income support for a cumulative 39 weeks after reaching your preservation age. In this case, you can access your full super benefit.
Please note: even if you satisfy the conditions for early access to super benefits due to ‘severe financial hardship’ you may belong to a super fund that doesn’t permit access on these grounds.
Secondly, if you are unable to meet the conditions required for ‘severe financial hardship’, you may be able to access your super early under ‘compassionate grounds’, through the Department of Human Services. The 'compassionate grounds' are as follows:
- for mortgage assistance if your home is going to be forcibly sold by the bank or financial organisation that lent you the money for your home mortgage, or the bank is going to foreclose on your mortgage, and you need your super benefits to prevent this from happening. In this case, you can access an amount not exceeding, in each 12-month period, the sum of 3 months’ repayment, AND 12 months’ interest on the outstanding balance of the loan.
- for medical treatment (medical costs for you or your dependant, or medical transport costs related to transporting you or your dependant [by land, water or air] to or from medical treatment). To access super for this purpose, two medical practitioners (including one a specialist in the area of illness), must certify that the treatment is necessary to treat a life-threatening illness or injury; and/or alleviate acute or chronic physical pain; and/or alleviate an acute or chronic mental condition. The treatment must not be readily available through the public health system, and must not be covered by private health insurance or by workers’ compensation.
- for modifications to a home and/or vehicle where you or a dependant suffers a severe disability. To access super for this purpose, the home must be your principal place of residence, or you must own or have joint ownership of your vehicle. If you live in a rental property a release can still be approved if your landlord has provided consent to the proposed modifications.
- for funeral or burial or other expenses related to the death of a dependant (who was financially, domestically or personally reliant on you). To access super for this purpose, super must be reasonably needed to cover a dependant’s death, funeral or burial expenses, including expenses from the funeral service provider and monument or headstone provider, but not from venue hire and catering.
- for palliative care for a terminal condition (that is, in the case of impending death) suffered by you or one of your dependants. In this case, however, it may be quicker to apply for release of super directly via your superannuation fund. This type of early release isn’t taxed.
For further information about any of these matters, please contact Springdale Legal.