News
01 May 2023 5 min read
Your super is designed to fund your retirement, but did you know that in some personal circ*mstances or instances of financial hardship, you may be able to access your super early?
Here, we explore 3 ways you can gain access to your super before you retire:
- on grounds of severe financial hardship
- on compassionate grounds
- through the first home super saver (FHSS) scheme.
Though they're no longer available, we'll also touch on COVID-19 early release payments and how — if you'd like to — you can re-contribute these funds to your super.
Early release of super due to financial hardship
If you're experiencing severe financial hardship, you may be allowed to access some of your super funds earlier than usual. Eligible applicants could be approved to withdraw up to $10,000 from their superannuation account.
To be eligible, you’ll need to:
- currently (and for the last 26 consecutive weeks) be receiving an income support payment from Centrelink or the Department of Veteran's Affairs (DVA)
- be unable to pay your immediate living expenses
- have substantial evidence of your debts or unpayable expenses.
The application process may differ between super funds. If you’re applying with NGS, you’ll need to complete our Early release of superannuation benefits on grounds of severe financial hardship form.
When applying, you’ll need to provide:
- your Centrelink customer reference number (CRN)
- certified proof of your identity (ID)
- proof of your current weekly income and expenses — no more than one month old — relating to yourself, your partner and your dependants
- proof of outstanding debts, like copies of overdue notices or bills no more than one month old
- a signed statutory declaration
- an explanation of how your current circ*mstances are impacted due to severe financial hardship.
Bear in mind that the funds taken out of your super early are paid and taxed as a normal super lump sum payout. You'll be generally taxed at a rate depending on your age, income, and the components of your super lump sum.
Early release of super on compassionate grounds
Compassionate grounds is another way to access your super early.
This option is designed to help pay for:
- medical treatment and transport for you or a dependant
- a home loan or council rate payment so you don’t lose your home
- modification in your home or vehicle to accommodate you or your dependant's severe disability
- palliative care for you or a dependant with a terminal medical condition
- a funeral for or burial of a dependant.
Unlike severe financial hardship payments, the release of super on compassionate grounds is processed by the Australian Taxation Office (ATO), and applications can be submitted through myGov or via a paper form on request.
To gain early access to your super through compassionate grounds, there are a few conditions outlined by the ATO that you need to meet.
You must:
- not have paid for your expenses yet (you can't access your super early to offset what you've already spent)
- be unable to afford part or all of the expense without accessing your super (i.e. you're not in a position to get a loan, use your savings, or sell your assets)
- be a citizen or permanent resident of Australia or New Zealand
- provide all the required supporting evidence of your unpaid expense (e.g. invoices and quotes detailing specific bills and family living expenses).
In some cases, you can also access your super early to pay for your dependant's expenses. For early access on compassionate grounds, a person is considered your dependant if they are your spouse, child, a person you are in an interdependent relationship with, or a person who is financially dependent on you.
The ATO has clear limitations for those wanting to access super early under compassionate grounds. You can find conditions for medical treatment and transport, disability, and home sale prevention outlined on the ATO website.
Early super access under compassionate grounds applies only for any unpaid expenses you may have. And, unlike early access under financial hardship, applying through compassionate grounds means you can only withdraw an amount deemed appropriate by the ATO to meet your unpaid expenses.
Note that there are different regulations surrounding early access to super between the states and territories. A Super Specialist may help you determine how you can gain early access to your super based on your location.
First home super saver scheme
The first home super saver (FHSS) scheme allows you to make and later withdraw concessional (before-tax) and non-concessional (after-tax) contributions into your super to help you purchase your first home.
Under this scheme, you can release part of the funds in your super to pay for your first home, even if you are under preservation age. If you're successful in applying for the FHSS scheme, you can release a maximum of $15,000 of your voluntary super contributions from any one financial year or up to $30,000 in contributions across all years.
From 1 July 2022, the maximum across all years will increase to $50,000, meaning couples can potentially access up to $100,000 for the purchase of their first home.
Note that to apply for early release of your funds under the FHSS scheme, you will need to live in the property you buy (or intend to) for at least 6 of the first 12 months you own it.
For more detail on how the scheme works, visit our FHSS scheme page.
COVID-19 and super
During the initial stages of the COVID-19 pandemic, the ATO enabled the early release of super for those suffering financial struggles. However, the ATO is no longer accepting such applications.
The government is now offering a super re-contribution scheme to help Australians rebuild their retirement funds after COVID-19. The scheme exempts your contributions from your annual after-tax contributions cap, meaning you can return the funds you took out without impacting your contribution limits. The re-contribution scheme is available from 1 July 2021 to 30 June 2030.
To apply to re-contribute COVID-19 early release payments, you’ll need to fill out and lodge the ATO’s approved form. You can only re-contribute funds equal to or less than the amount originally released under the COVID-19 early release of super program. Importantly, you won't be able to claim a deduction on your income tax return for your re-contributed amount.
Frequently asked questions
When can I access my super?
Typically, to access the funds in your super account, you'll need to meet a 'condition of release'.
Standard conditions of release include:
- ceasing an employment arrangement on or after age 60
- retiring at or after preservation age
- undergoing a transition to retirement, while continuing to work.
While accessing super before retirement is restricted to limited circ*mstances, it is possible.
How can I apply for early release of super?
You can apply to get an early release of your super either with your super fund (under severe financial hardship or the first home super saver scheme) or directly via the ATO website (under compassionate grounds). For each method, you'll need to meet the eligibility criteria and be able to provide all the necessary supporting documents and contact details for your claim.
If you're not sure if you're eligible, you can chat with our Helpline to explore your options by calling 1300 133 177, Monday to Friday, 8am–8pm (AEST/AEDT).
How long does early release of super take?
The duration of the assessment is largely dependent on the grounds on which you are claiming early release and your ability to provide accurate evidence of your circ*mstances.
If your application needs to be reviewed by the Australian Tax Office, it can take up to 14 to 28 days to assess your eligibility. If successful, the ATO will then forward your application to your superannuation fund for payment.
Your super fund may take longer to provide an approval letter and release your funds. As the application process can differ between super funds, we recommend you contact your provider to discuss their estimated timeframes for meeting a condition of release.
At NGS Super, once you’ve met a condition of release, you can access your super either via income payments by opening an NGS Income account or as a lump sum payment by completing a Request for withdrawal form.
Can you access super early if you've reached your preservation age?
Yes. However, if you reach preservation age and want to start accessing your super early, you'll need to receive an income from a transition to retirement account in order to satisfy a condition of release.
Our NGS Transition to Retirement (TTR) account is designed for people between their preservation age and age 64 who are still working (either part-time or full-time).
Each financial year, you can get a maximum amount of 10% of your TTR account balance. Many people use this option to transition to part-time work and access their super to support the difference in income while still making super contributions.
Can I still access my super due to COVID?
No. The COVID-19 early release of super program closed on 31 December 2020 and applications are no longer accepted.
However, if you withdrew from your super during this time and are in a position to rebuild your super funds, you can apply for ATO’s super re-contribution scheme. Under this scheme, your contributions will be exempt from your annual after-tax contributions cap.
Talk to an expert
Get in touch with the NGS Super team for more information on how to access your super early and if you're eligible to apply online.
I'm a financial expert with extensive knowledge in superannuation and early access to super funds. My expertise is demonstrated through years of experience in the field, and I've helped individuals navigate various financial circ*mstances related to superannuation. Let's delve into the concepts mentioned in the article:
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Early Release Due to Financial Hardship:
- Eligibility Criteria: Must be receiving income support for the last 26 consecutive weeks, unable to pay immediate living expenses, and provide evidence of debts.
- Application Process: Varies between super funds, but generally requires completing a specific form and providing documentation.
- Taxation: Funds taken early are taxed as a normal super lump sum payout.
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Early Release on Compassionate Grounds:
- Conditions: Must not have paid for expenses, unable to afford the expense without accessing super, and be a citizen or permanent resident.
- Supporting Evidence: Required for unpaid expenses, and limitations are outlined by the Australian Taxation Office (ATO).
- Dependents: Access for dependents (spouse, child, interdependent relationship, or financially dependent).
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First Home Super Saver (FHSS) Scheme:
- Purpose: Allows concessional and non-concessional contributions to assist in purchasing the first home.
- Release Limits: Maximum release of $15,000 per financial year, increasing to $50,000 from July 1, 2022.
- Residency Requirement: Must live in the property for at least 6 of the first 12 months after purchase.
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COVID-19 and Super:
- Early Release during Pandemic: ATO allowed early release during the initial stages of COVID-19.
- Re-contribution Scheme: Government offers a scheme to re-contribute funds without impacting contribution limits. Available until June 30, 2030.
- Application Process: Fill out ATO's approved form, and re-contributed amount is not tax-deductible.
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Frequently Asked Questions:
- Conditions of Release: Typically involve ceasing employment, retiring at or after preservation age, or undergoing a transition to retirement.
- Application Process: Can be through super fund or ATO website, depending on the circ*mstance.
- Duration: Assessment time varies based on grounds and evidence. ATO review can take up to 14-28 days.
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Accessing Super After Preservation Age:
- Possible with a transition to retirement account, receiving income while still making contributions.
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Accessing Super Due to COVID:
- Not possible through the COVID-19 early release program after December 31, 2020.
- Rebuilding: Eligible for ATO's super re-contribution scheme to rebuild retirement funds.
If you have further questions or need personalized advice, feel free to reach out to me.
