Early access to superannuation funds, though primarily reserved for retirement financing, is indeed attainable under specific circumstances. While these withdrawals typically necessitate exceptional situations like health challenges or severe financial distress, avenues for early access do exist.
In this comprehensive guide, we’ll discuss the pathways to securing early access to your super, address potential hurdles, and cover essential insights into superannuation and claim applications. Let’s delve in.
Understanding Conditions for Super Access
Contrary to popular belief, the age of 65 isn’t the sole gateway to accessing superannuation funds. Instead, eligibility hinges on meeting specified ‘Conditions of Release.’ According to the Australian Taxation Office (ATO), common conditions include:
- Attainment of preservation age coupled with retirement
- Initiation of a transition-to-retirement income stream upon reaching preservation age
- Termination of employment post the age of 60
- Reaching the age of 65, irrespective of retirement status
- Death (not ideal!)
Exploring Early Access Possibilities
Attaining early-release access to superannuation is entirely feasible, contingent upon meeting stringent eligibility criteria. Several instances and exceptional circumstances warranting early access include:
Compassionate Grounds: For dire medical treatment, severe disabilities, palliative care, or dependent support. An applicant is granted access to their super on compassionate grounds if they’re in dire need of help in financing the following:
- Personal medical treatment/severe disability palliative care or for a dependent
- Personal medical transport or for a dependent
- Modifications of their home and vehicle to accommodate the special needs caused by a severe disability
- Death expenses, funeral expenses, or burial expenses of a dependent
- Preventing foreclosure or forced sale of home to home buyers
Terminal Medical Condition: Fulfilling specific terminal illness criteria certified by two doctors, including a specialist. You will be granted access to your super early if specific terminal medical conditions are met, including the following:
- Certification(s) coming from two doctors, working together or separately that indicates the confirmation of their terminal illness and the possibility of dying within 24 months
- One of the doctors MUST be a specialist in the field related to your terminal illness
- Ongoing 24-month certification certain period
Severe Financial Hardship: Accessible under stringent government support payment criteria and subject to preservation age. Whether you can get the funding from this method or not will depend on how old you are according to your birth preservation age:
- If you’re younger than ‘your preservation age plus 39 weeks’, you need to have received certain government support payments for 26 weeks in a row and be able to demonstrate that you still can’t cover your family living expenses. You can take out between $1,000 and $10,000 or the full balance if you have less than $1,000 left in your super after tax. You can only make a Severe Hardship Withdrawal once each year.
- On the other hand, if you are older than ‘your preservation age plus 39 weeks’ and you’ve received certain government support payments for 39 weeks after reaching that age, you can take out as much as you need. But you must not have been gainfully employed when you applied for the super early access.
Temporary Incapacity: If you’re temporarily incapable of working or are forced to work less due to a medical issue (either physical or mental), you are eligible to withdraw some of your superannuation. Withdrawal of super this way is usually used for insurance benefits tied to your personal superannuation account.
Permanent Incapacity: Commonly known as a ‘disability super benefit’, access to this payment is granted to applicants who can no longer work due to a permanent and severe medical condition (either physical or mental). Typically it will be your super fund that checks if your condition no longer serves your profession and if it’s something that hinders your efficiency with your usual work.
Even under the super access, you may still be allowed to take in easier jobs or part-time work in another field if you qualify. This access will allow you to withdraw your super as a lump sum or regular payments.
To pay less tax or tax-free, you’ll need two doctors, one of whom MUST be a specialist, to confirm your permanent incapacity to work.
Super Balance Under $200: Facilitating access for individuals with depleted super balances, subject to specific conditions. The concept of ‘lost super’ underscores the significance of tracking and reclaiming misplaced superannuation funds, safeguarding against financial loss.
Guarding Against Scams and Illicit Schemes
Vigilance against scams and illicit practices is paramount. Instances of unauthorised access or fraudulent schemes demand prompt action, including:
- Regularly reviewing superannuation accounts for unauthorised transactions or tampering
- Exercising caution in response to suspicious communications, refraining from divulging personal information
- Seeking verification from reliable sources, such as financial advisers, to validate legitimacy
Final Thoughts
While accessing superannuation funds prematurely is discouraged, life may necessitate exploring available avenues. However, it’s imperative to proceed judiciously, adhering to prescribed eligibility criteria and safeguarding against potential risks.
For individuals contemplating early access to super or seeking assistance in navigating claim procedures, Greybox Wealth can help you understand your eligibility to access your superannuation.
Click here to book your appointment and take proactive steps towards managing your superannuation effectively.
