You must apply to your superannuation fund to claim early access to your super benefits by severe financial hardship, terminal medical condition, temporary or permanent incapacitation, termination of employment.
Five Grounds for Early Access to Superannuation
Severe financial difficulty.
You have to meet certain conditions for early access to super benefits based upon severe financial difficulty, which are described in a different regulation of the superannuation laws (Sub-regulation 6.01 (5) and (5A) of the Superannuation Industry (Guidance) Laws 1994).
Additionally, you are thought to be in serious financial difficulty; under the super laws if you meet the following conditions:
- You have received Commonwealth income support for a certain duration of 39 weeks after you reached your preservation age, and this is verified by written proof provided by at least one Commonwealth department or firm responsible for the income assistance payments.
- If you are working and you are working less than 10 hours a week. More specifically, during the time of the early access application, you were not fully utilized on a full-time or part-time basis. Part-time work is defined to suggest at least 10 hours a week, and less than 30 hours every week.
If your super fund permits early access by extreme financial hardship, and you satisfy the above age, work, and earnings support requirements, then you can access your full superannuation benefit.
Always remember that even if you have met the conditions for early access to your super benefits due to extreme financial hardship; you may belong to a super fund that does not allow access to these premises.
As an initial step, talk to your super fund regarding the matter and whether or not they allow benefit withdrawals for financial hardship.
Compassionate grounds, including medical treatment.
You are allowed to withdraw a portion of your superannuation based on compassionate grounds for due expenses.
Compassionate grounds cover:
- medical transport and medical treatment for you and the dependent
- making council rates or loan payments, so you do not forfeit your home
- palliative care for you and your dependent
- modifying your vehicle or home, or purchasing disability aids for you or your dependent due to severe disability
- expenses linked with a burial, funeral, or death of a dependent.
The amount of superannuation you can get is limited to what you practically require. It is paid and taxed just like a regular superannuation lump sum. If you’re below the age of 60, this is usually taxed between 17% – 22%. If you’re older than 60 years old, you won’t be taxed.
You are suffering from a terminal medical condition.
You can request a release of your superannuation benefits towards a member if they are suffering from a terminal medical condition. A terminal medical condition occurs if:
- Two registered medical professionals have certified, separately or jointly, that the super members are suffering from a particular illness, and has acquired injury that will likely end up in the member’s death within 24 months after certification.
- One of the medical practitioners specializes in the field that relates to the member’s injury or illness.
- The certification time frame isn’t finalized for each one of the certificates.
- The certification period is 24 months since the certification date.
Should they meet the condition of release, all benefits that have been accrued up to the present becomes unrestricted non-preserved. Additional benefits obtained by the member in the certification period is also classified as unrestricted non-preserved benefits.
Such benefits can be obtained as a tax-free super lump sum payment within the certification period. Remaining balances at the end of the certification period can be purchased at any period, although not tax-free.
Benefits that have been accrued after the condition of release doesn’t cover the certification period.
You’re temporarily incapacitated.
Superannuation funds may pay benefits to members who are temporarily incapacitated. Such condition of release is usually applicable to SCI or Salary Continuance Insurance stored within super. The only benefits that aren’t minimum benefits (insured SCI payment) may be released under such condition of release.
Temporary incapacity occurs when the member:
- has stopped being financially employed, or
- has temporarily stopped receiving income under continued fruitful employment arrangements
- suffers from mental or physical ill-health because the member ended being beneficially used, and
- isn’t permanently incapacitate.
Generally, the temporary incapacity release condition doesn’t apply towards any member’s accumulated benefits but is the mechanism that enables fund trustees to issue consecutive salary payments to qualified members.
Employment has been terminated, and your super account balance is less than $200.
Under the Australian regulations, you can gain early access to your super benefits if your fund balance is lesser than $200 and your employment was terminated, whether you quit or lose your job. The primary reason for this is that your poor balance will be likely eroded by admin fees.
A case of lost super
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Generally, you can gain access to your superannuation once you retire at the age of 65 or reached the preservation age (under age-based restrictions).
But there are circumstances like the five grounds to early access to superannuation that allows you to withdraw some of your super money early as long as you meet the eligibility requirements.