Detailed Steps in
Accessing your Super

Steps In Accessing your Super - Fact Sheet

WILL MY SUPER FUND RELEASE MY SUPER?

Not all super funds allow early access to your super on either severe financial hardship or compassionate grounds. Check with them first.
If they do not allow early access, and you have considered all of your options (including loss of insurance cover) and access is appropriate – you can switch funds and then apply for early access.

AM I ELIGIBLE?

To get your super released early, you must:

  • meet a compassionate ground (apply to the Australian Taxation Office (ATO)) (see below); and/or
  • have a terminal medical condition (apply to your superfund); and/or
  • temporarily or permanently incapacitated (apply to your superfund); and/or
  • have less than $200 in super (apply to your superfund); and/or
  • be in severe financial hardship (apply to your superfund) (see below); and/or
  • be a temporary resident leaving Australia for good (apply to your superfund).

You can apply for early release of super to help your partner, child or other dependant. It must be for compassionate grounds.

From 1 July 2018 responsibility for the administration of the early release of super on compassionate grounds transferred from DHS to the ATO. You will be required to have a MyGov account to complete the process.

1. ACCESSING YOUR SUPER ON A SPECIFIED COMPASSIONATE GROUND

From 1 July 2018 responsibility for the administration of the early release of super on compassionate grounds transferred from DHS to the ATO. You will be required to have a MyGov account to complete the process.

To be eligible to access your super on compassionate grounds you must:
A. Generally, show funds are required to pay:

  • for medical treatment or medical transport for you or dependant;
  • a loan to prevent your home being sold (usually by the lender or local council) (“mortgage assistance”) (see below for further information and find out more about Mortgage Stress);
  • to modify your home or motor vehicle to accommodate for the special needs of you or a dependant arising from a severe disability;
  • medical – to pay for treatment or travel to treatment;
  • mortgage – to stop the bank from selling your home;
  • disability – to modify your home or car;
  • palliative care – for yourself or a dependant; or
  • funeral costs– for a dependant.
B. Demonstrate you lack financial capacity to pay for the expense without accessing superannuation.
To apply to access your super on compassionate grounds you will need to:

  1. Contact your super fund and check that they will release your super on compassionate grounds if approved by the ATO and ask what identity documents you need.
  1. If they do, apply to ATO by:
  • using the online form. You will need to create a MyGov account at my.gov.au to access the online form.
  • collect quotes and unpaid invoices for the amounts you need; collect documents to prove you need the money – these are different for each compassionate ground (see the ATO website for details); and
  • submit your application form and supporting documents to the ATO.
  1. If the ATO approves the application you will be notified in your MyGov Inbox. The ATO will also send the approval to your super fund.
  1. If your application is approved, you must contact your super fund to arrange release of your money. You will need to provide the super fund with a copy of the approval letter to process your payment.

It can take the ATO up to 14 days to either accept or deny your application.

If your super fund will not release your super on compassionate grounds you may consider transferring to a fund that will.

If the ATO refuses your application

If the ATO refuses your application, you only have 14 days to seek a review. If your application was not approved because the ATO states they did not get all the required supporting documents or you have new information, then you need to submit a new application (not a review).

2. ACCESSING YOUR SUPER DUE TO SEVERE FINANCIAL HARDSHIP

To be eligible to access your super due to severe financial hardship – before you reach your preservation age – you must:

  • be unable to pay reasonable and immediate family living costs; and
  • have been in receipt of 26 weeks continuous eligible income support Centrelink benefits

The minimum amount that can be paid is $1,000 (unless your super balance is less than $1,000) and the maximum amount is $10,000. It will be paid as a lump sum. You can only make one withdrawal from your super because of severe financial hardship in any 12 month period.

To be eligible to access your super due to severe financial hardship, after you have reached your preservation age, you must:

  • still be out of retirement (i.e. working, looking for work and/ or you must not have notified the ATO you have retired); an
  • have been in receipt of 39 weeks continuous eligible income support Centrelink benefits since you reached your preservation age. There is no restriction on the amount you can withdraw after you have reached your preservation age.

To apply to access your super on compassionate grounds you will need to:

1. set out the cause of your severe financial hardship;

2. specify how you will spend the money if it is released. If there are specific bills that need to be paid, the fund will often require you to provide copies;

3. provide evidence of yours and your family’s income and expenditure;

4. show you are in arrears, not just that you have debts, and

5. provide your super fund with a letter from DHS or Centrelink showing you in receipt of continuous eligible income support payments. This letter is called a Q230 Financial Hardship letter.

If the super trustee is not satisfied that the super will alleviate your financial hardship then they may decline to release the funds.

Mortgage assistance is available to prevent your mortgage lender or local council taking action to sell your home for mortgage arrears or unpaid rates. Access to your super should only be considered if all other options have been exhausted. Even then, caution needs to be taken as you should be very certain you can pay your normal mortgage payments after your super is released. If you cannot, you need to consider selling your home as you risk the super you have withdrawn and your house.

If you are going to sell your house anyway you should not access your super. Again, this will simply result in you losing your super, your house and the taxed portion of the released super (which will go to the ATO).

How to apply to release my super for Mortgage in arrears or Council rates.
Step 1

Speak to your home lender’s hardship department or your local council. Negotiate a hardship arrangement. Even if you are applying for your super you still need to negotiate a hardship arrangement while you do this. Speak to a financial counsellor (call the National Debt Helpline on 1800 007 007) or get advice about all options available to you.

Step 2

Contact your super fund and check that they will release your super on compassionate grounds if approved by ATO.

Step 3

You will need a letter from your lender, council or other creditor on its letterhead to give to the ATO which:

  • is dated;
  • is no more than 30 days old from the date you submit it.
  • states:
  • there’s an overdue amount;
  • the lender will sell your home if you don’t pay it;
  • the address of the home;
  • the total amount for three months of loan repayments;
  • the total amount for the next 12 months of loan interest;
  • the lender’s name; and
  • the bank account number of the loan.
NOTE

If you intend to sell your property, it is unlikely ATO will agree to the release. If you have your property on the market to sell as an alternative option in the event that ATO does not approve your application for release, you should provide a statutory declaration with your application stating that you intend to take the property off the market once the super is released. You should not swear false statutory declarations, as this may amount to an offence.

Before applying for the release of your super, you should try to negotiate with your lender or council for a repayment arrangement potentially capitalising the arrears (that is, add it to your loan balance and let you pay it off over time). This may avoid the need of having to apply for your super at all. It is also recommended you see a free financial counsellor.

How much Super can be release on the ground of Mortgage Hardship?

The maximum that can be released in a 12 month period is equal to three months repayments plus twelve months interest on the outstanding balance of the loan. However, If the amount you need is more than you have in super, you’ll need to either:

  • reduce the arrears; or
  • provide a letter from the lender confirming they will accept the amount available in super to stop the sale of the home; or
  • consider other options, for example, selling your home or another asset.

Step 4

Submit your application to the ATO with supporting documentation using the my.gov.au website. When applying for release on the grounds of mortgage hardship:

1. the property under threat must be your principal place of residence (not your holiday home or investment property). If you are not living in the property you should get legal advice.

2. the person applying for the release of super must also be the debtor (or one of the debtors) and responsible for making the mortgage repayments or council rates. Super will not be released to pay a mortgage in another person’s name, unless it is your principal place of residence.

3. you must have no other financial means to repay the arrears such as savings or selling another asset. You should speak to a financial counsellor or get legal advice.

Step 5

Keep making your repayments or the amount agreed under your hardship arrangement because if your arrears exceed the amount available in your super, your application may be declined or your lender may still exercise their rights to repossess your home (because the super obtained is not sufficient to cover the arrears).

You should continually keep your lender up to date as to the progress of your application.

You should also ensure that the lender does not take legal action while you are waiting as the legal fees may be added onto your loan account further increasing your arrears. If you receive a statement of claim (or summons) commencing legal proceedings, you need to lodge a complaint in your lender’s external dispute resolution scheme immediately! See our Financial Hardship Factsheet.

Step 6

If the ATO approves the release, you will need to send the original ATO letter to your super fund. You will also need to comply with your super fund’s requirements. This may include a separate form and identification verification.

Step 7

Pay the money to the lender. Sometimes your super will be released to you directly and not to the lender. You should make sensible decisions as to where the money should be paid. If you can save your home and even make a few payments in advance, you should onsider doing so. If your lender says the money is not enough and they will proceed to repossess and sell the property regardless, you should consider putting some money aside for rent and bond on an alternative place to live. If you are not sure, speak to a financial counsellor or get advice.

HOT TIP

Do not make promises that the super will be released by a certain date. You are not in control as to how fast the ATO will process your application, or how long your super fund will take after that. Your application may get delayed for any number of reasons. You do not want to breach an agreement for things outside of your control.

Compassionate Grounds
- Quick Read

How to Access Super on Compassionate Grounds – Quick Read

How to Access Super on Compassionate Grounds – Quick Read

A. The ATO can approve the early release of your benefits on the following compassionate grounds:

  • Medical treatment – for medical or dental treatment, for yourself or a dependant;
  • Medical transport – for transport to medical or dental treatment, for yourself or a dependant;
  • Mortgage assistance – to prevent your home from being sold by the lender that has the mortgage;
  • Modification to your home and/or motor vehicle – to modify your home or vehicle to accommodate the needs of you or a dependant, in the case of a severe disability;
  • Care for terminal medical condition – for palliative care for a person with a terminal medical condition, whether it is yourself or a dependant; and funeral assistance – for expenses associated with a dependant’s death, funeral or burial.

B. Each of the above compassionate grounds has their own application form which you are required to complete and submit regarding your situation. You can download the form[s] that match your situation from the ATO’s website. Alternatively, you can call Access My Super to assist you with the application process 1800 845 121.

C. If the ATO gives permission, you need to attach the original letter they provide to the complete and application form from your super fund, to allow the funds transferred to you.

D. Any payments from your superannuation account maybe subject to Government taxes and withdrawal fees.

E. Not all super funds allow early access to your super on either compassionate grounds or severe financial hardship. Check with them first. If they do not allow early access, and you have considered all of your options (including loss of insurance cover) and access is appropriate – you can switch funds and then apply for early access.

Need more information? Access My Super is always at your service. If you have any questions or need any assistance with completing the application, please contact us on 1800 845 121.
Quick Read

Steps In Accessing your Super – Fact Sheet

THINGS TO THINK ABOUT

If you’re eligible to access your super early before you retire, it’s worth remembering that:

A. The ATO can approve the early release of your benefits on the following compassionate grounds:

  • super is a long-term investment for retirement, so withdrawing your super early may impact your income and lifestyle in retirement
  • all or part of your withdrawal may be taxed
  • other Centrelink benefits may be impacted by a payment from super

Before you access your super, you may wish to:

  • check if you are eligible for any Government payment support at humanservices.gov.au or by visiting your nearest Centrelink service centre.
  • call the National Debt Helpline and access free financial counselling
  • have a chat with a financial adviser to consider your options

Compassionate grounds

You can apply to the Australian Taxation Office (ATO) for early release of your super on compassionate grounds.

Compassionate grounds include:

  • Medical to pay for treatment or travel to treatment for you, your partner, child or other dependant
  • Funeral to pay for expenses for a dependant
  • Disability to modify your home or car
  • Palliative care for you or a dependant
  • Mortgage to stop the bank from selling your home.

Permanent incapacity or terminal illness

You can access your super early if you’re:

A. The ATO can approve the early release of your benefits on the following compassionate grounds:

  • Permanently incapacitated – unlikely to engage in gainful employment for which you’re reasonably qualified (by education, training or experience) because of physical or mental ill health
  • Diagnosed with a terminal illness – you will require proof of your condition from two separate medical practitioners. In the case of terminal illness, one of the practitioners must be a specialist in the particular field.

If you have Death or Total and Permanent Disablement (TPD) insurance as part of your super account, you may be able to make a claim.

Will my super fund release my super?

Not all super funds allow early access to your super on either severe financial hardship or compassionate grounds. Check with them first.

If they do not allow early access, and you have considered all of your options (including loss of insurance cover) and access is appropriate – you can switch funds and then apply for early access.

There are strict rules about who can apply, and the proof required. For more information, please contact us and we will guide you through the process.
Need more information? Access My Super is always at your service. If you have any questions or need any assistance with completing the application, please contact us on 1800 845 121.
Accessing Super Before Retirement

Steps In Accessing your Super – Fact Sheet

ACCESSING YOUR SUPER BEFORE RETIREMENT

There are certain circumstances where you may need help, such as injury, ill-health or financial hardship when you may need early access to your super. To do this, you’ll have to meet what’s called a condition of release (determined by law). This fact sheet will help you understand what these conditions are.

COMPASSIONATE GROUNDS

You might be able to access your super early under compassionate grounds. First, you’ll need to apply to the Australian Taxation Office (ATO) to process your request or you can contact us to assist you in the application process 1800 845 121.

Here are the reasons for early release under compassionate grounds:

  • You need to pay for medical treatment or medical transport for yourself or a dependant
  • You need to pay for expenses related to a death, funeral or burial
  • You need to pay for expenses relating to the palliative care for you or your dependant.
  • You need to pay for modifications to your home or vehicle to accommodate special needs arising out of you or your dependant becoming severely disabled
  • You need to make a payment on a home loan to prevent foreclosure

PERMANENT INCAPACITY

You may be able to access your super due to physical or mental ill health, if:

  • It’s unlikely, you’ll ever engage in gainful employment of the type for which you are reasonably qualified by education, training or experience, and
  • Your illness has been certified by at least two medical practitioners.

TERMINAL MEDICAL CONDITION

If you’re suffering from a terminal medical condition, you can gain access to your super. You’ll only need to provide directly to your super fund with medical certificates from two registered medical practitioners, one being a specialist in the area of your condition.

The two practitioners must certify that you’re suffering from an illness or injury which is likely to result in your death within 24 months. The Terminal Illness benefit includes your account balance and if applicable, the higher of either your Death or Total and Permanent Disability insurance cover that may be in force at the date of the doctor’s certification.

For more information about this, visit the ATO website or call us on 1800 845 121. Once you have been approved by the ATO, you will need to contact your super fund to get the release transferred to your account.

SEVERE FINANCIAL HARDSHIP

If you are experiencing severe financial hardship, under current law you may be able to access your super early to help alleviate the stress.

If you are under your preservation age

At the time you apply you’ll need to show that you’ve been receiving Commonwealth income-support payments (like Newstart) for 26 continuous weeks, and that you’re unable to pay for reasonable and immediate living expenses. Keep in mind that your fund can only release one lump-sum payment in any 12-month period – up to a maximum of $10,000 (before any applicable tax).

If you have reached your preservation age

At the time you apply, you’ll need to show that you’ve been receiving Commonwealth income-support payments for a cumulative period of 39 weeks (since preservation age) and that you’re either not working or working for less than 10 hours a week. Usually, in this case, you can release your full balance, with no maximum limit.

TEMPORARY INCAPACITY

If you have temporarily ceased to be gainfully employed due to physical or mental ill health, but are not permanently incapacitated, and you have taken out income protection insurance with your Super Fund, you may be eligible to receive a benefit on the grounds of temporary incapacity. The benefit you’ll receive will be an income stream, not a lump sum. Generally, you won’t be eligible if you’re receiving sick leave payments.

WILL MY SUPER FUND RELEASE MY SUPER?

Not all super funds allow early access to your super on either severe financial hardship or compassionate grounds. Check with them first.

If they do not allow early access, and you have considered all of your options (including loss of insurance cover) and access is appropriate – you can switch funds and then apply for early access.

WE’RE HERE TO HELP

You can call us on 1800 845 121.
Financial Impact

Steps In Accessing your Super – Fact Sheet

Financial Impact Consideration of Accessing you Superannuation

You may want to talk to an independent financial adviser before applying for compassionate release of superannuation.

The following must be considered carefully before accessing your superannuation:

  • Releasing your super early will generally count towards your assessable income for income tax purposes. This can affect your family tax benefit or child support (if applicable).
  • If you are under the preservation age, you need to pay tax on any lump sum payment from your early release of superannuation. The rate of tax is dependent on the components of the amount released. Your fund will provide you with the correct amount.
  • The amount of super you can withdraw is limited to what you reasonably need. It is paid and taxed as a normal super lump sum. If you are under 60 years old, this is generally taxed between 17% and 22%. If you are over 60 years old, you will not be taxed.

Not all super funds allow early access to your super on either severe financial hardship or compassionate grounds. Check with them first.

If they do not allow early access, and you have considered all of your options (including loss of insurance cover) and access is appropriate – you can switch funds and then apply for early access.

For a detailed explanation on how tax will apply to your super we recommend you visit the ATO’s website.

Need more information? Access My Super is always at your service. If you have any questions or need any assistance with completing the application, please contact us on 1800 845 121.

Cons and Pros

Steps In Accessing your Super – Fact Sheet

ACCESSING YOUR SUPERANNUATION EARLY

This factsheet focuses on the Cons and Pros of accessing your superannuation early. This factsheet is for information only. It is recommended that you get financial advice about your situation.

ACCESSING YOUR SUPER

Superannuation (super) is a protected asset intended to fund your retirement.

You can access your super:

  • early, before you reach your preservation age, in very limited circumstances mainly related to specific medical conditions or severe financial hardship.
  • when you reach preservation age (i.e. the age at which you can retire and access your super benefits) and retire
  • when you turn 65 (even if you haven’t retired)
  • when you reach preservation age and continue to work, under the transition to retirement rules

Your preservation age depends on when you were born. You can use this table to determine your preservation age:

Date of birthPreservation age
Before 1 July 196055
1 July 1960 to 30 June 196156
1 July 1961 to 30 June 196257
1 July 1962 to 30 June 196358
1 July 1963 to 30 June 196459
1 July 1964 to after60

THE PROS AND CONS OF ACCESSING YOUR SUPER EARLY

Just because you can access your super, does not mean you should. As with all financial decisions, you need to think through the consequences and the pros and the cons.

PROS
  1. You will have access to funds which may relieve your financial burden.
CONS
  1. You will lose an asset that is protected in bankruptcy and otherwise protected from creditors until you take it out of the fund.
  1. The money will be taxed by the Australian Tax Office (ATO) on release, at 20% or more.
  1. 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.
  1. It may not solve your financial problem and you will have less available for retirement.
  1. It may result in you having to:
  • pay more tax
  • accept lower Centrelink payments
  • receive less child support
  • pay more child support
If you’ve got any general questions about the process of accessing your superannuation, or you just want the comfort of knowing you’re on the right track in your application process, why not contact us? It’s all up to you, no obligation.