Provided by Mercer: 18/2/09
Usually, superannuation savings cannot be accessed before an individual is at least 55 years old, or later subject to preservation rules.
However, under limited, prescribed circumstances, you may be able to access your super earlier. This includes release on:
1. Compassionate grounds, or
2. Under 'severe financial hardship' provisions.
You should contact your super fund to find out if the rules allow early release under these circumstances. The Mercer Super Trust is able to allow early release of super on compassionate grounds or under severe financial hardship.
1. Early release of superannuation funds on compassionate grounds
A person who doesn’t satisfy the ‘financial hardship’ conditions (see section 2 below) may still be able to access their super by applying under compassionate grounds as set out in the law. Applications in these circumstances should be made to APRA.
Access to super may be available in order to cover expenses in respect of:
- medical treatment or transport for the member or his/her dependant where the treatment or transport is necessary to treat a life threatening illness or injury, or to alleviate acute or chronic pain or acute or chronic mental disturbance, and where such treatment or transport is not readily available through the public health system
- to prevent foreclosure of a mortgage, or exercise of a power of sale over the member's principal place of residence. However, this ground does not include making a payment on a mortgage that is not in arrears (notwithstanding anticipation of future difficulties with repayments), or where this ground does not cover payments on a mortgage for which someone else is liable (e.g. a dependant), or for a second or investment property
- modifications to the family home and/or vehicle to meet the special needs of a disabled member or his/her disabled dependant
- palliative care, in the case of impending death for a member or his/her dependant, or
- death, funeral, or burial expenses of a member’s dependants, where that person had been reliant on a member either financially, domestically or personally.
The legislation also allows APRA to assess applications for early release of benefits where the circumstances are consistent with, or in direct relationship to, the grounds specified above.
To apply for early access to your super on compassionate grounds, you should:
1. Contact your super fund – to confirm that the rules allow early access.
2. Contact APRA – information is available on the APRA website or by calling
1300 131 060.
2. Early release of super under 'severe financial hardship' provisions
To be able to access your super savings under the financial hardship rules you must:
- be in receipt of a Commonwealth income support payment (such as Newstart, Disability Support Pension etc), and have been so, continuously, for the last 26 weeks, and
- satisfy the trustee of your super fund that you are unable to meet reasonable and immediate family living expenses.
If you satisfy both of the above tests you may receive a one off lump sum payment of between $1,000 and $10,000 from your super (tax may be required to be paid on the withdrawal). No other withdrawals of this type would be allowed in the following 12 months.
If you are aged 55 years and 39 weeks or more, you may be able to access some or all of your super savings if you:
- have received a Commonwealth income support payment for a cumulative period of 39 weeks after reaching age 55, and
- are not gainfully employed on a full-time or part-time basis on the date of your application to the trustee.
Tax may be payable if you are under age 60. In both cases you need to provide the trustee of your super fund with a letter from Centrelink (or Department of Veterans’ Affairs) confirming that you have been receiving an income support payment.
Applications in these circumstances should be made directly to your super fund.
Need help?
Members of the Mercer Super Trust should call 1800 682 525 (8am to 7pm AEST, Monday to Friday).
This information has been prepared by Mercer (Australia) Pty Ltd ABN 32 005 315 917 for general information only. The information does not take into account your personal objectives, financial situation or needs. Therefore, you should not act on this information if you have not considered the appropriateness of this information to your personal objectives, financial situation and needs. You should consult a licensed or appropriately authorised financial adviser before making any investment decision.
