When can you access Superannuation funds early?
Superannuation is designed for retirement – but it doesn’t always work out as planned. There are a number of exceptions that may allow you to use these funds in times of need sooner rather than later.
While many involve unfortunate circumstances, it’s good to know you may be able to apply for early release of your funds in these situations from the Department of Human Services.
Here are some circumstances in which you could access superannuation funds early.
Financial distress
If your mortgagee looks like they might repossess or sell your home due to arrears on your mortgage, you may be able to apply for an early release of your super fund. This is the case if:
- The property in question is where you live
- You’re responsible for the mortgage repayments
- You can’t afford to pay the arrears without the help of your retirement fund
Note, you will not be able to access your Super early if you expect to have trouble with making repayments but you are not yet in arrears on the mortgage, your mortgagee isn’t threatening to repossess your home, or if you are in rental arrears.
In cases of severe financial hardship, you can also apply directly to your superannuation fund. You can do this for early access if you have received income support for 26 weeks and can’t pay immediate expenses. Your Superfund will only be able to release a maximum $10,000 each 12-month-period. Alternatively, if you have been on income support for 39 weeks after reaching your Preservation Age, you may be able to access your full super fund.
Disabilities
You may also be able to dip into your retirement savings to make modifications to your home or vehicle under special circumstances. This is if you or a dependant has a severe disability that requires such modifications or other aids, and you can’t afford these purchases without the help of an early superfund release. If the disability has not been diagnosed as severe or if the property you wish to modify is not the main residence of the individual with the disability then you will not be eligible.
Severe or terminal illness
If the worst were to happen, and you or a dependant needed medical treatment, you may be granted an exemption to access your Super. The medical bills would need to not be covered by the public health system or insurance, or be possible to pay without the help of your super. Exceptions will not be made if the bills are covered through work.
An early release for palliative care bills is similar, you would just need to talk directly with your superannuation provider.
Final goodbyes
You can apply for an early release of your Super if a dependant has passed away and you need the aid of an early superannuation release to pay for the funeral. Keep in mind that to apply, the person who has passed must be a dependant and that you can only apply for unpaid quotes and invoices. Limits apply to how much can be released.
Other
Finally, you may be able to apply for reasons of severe financial hardship, or if you plan to leave Australia forever after being a permanent resident. You would need to present your case to the Australian Government Department of Human Services. As with all of the cases outlined above, you will need to meet all the criteria and have the supporting documents to match, so be sure to read the fine print.
Reaching retirement
Of course, many people will be able to wait until they reach retirement age (currently 65, but due to rise to 67 by 2023 according to the Department of Social Services) before having full access to their funds. Then there’s the Australian ‘Preservation Age’, which has nothing to do with delicious jams and everything to do with potentially accessing retirement funds before the age of 65.
Depending on when you were born, this can be as early as 55 or as late as 60.
According to our friends at the ATO, preserved benefits are “all contributions made by or on behalf of a member, and all earnings since 30 June 1999… Employer eligible termination payments (ETPs) rolled over into a super fund after 30 June 2004 are also preserved benefits.”
If you are a member of Virgin Super, get in touch if you think any of the above may apply to you.
In any case, working up a great retirement fund will likely come in handy – whether sooner or later.