COVID-19 – Accessing your superannuation early
The Federal Government has recently introduced measures that allow individuals affected by the economic impacts of COVID-19 to access a limited amount of their superannuation early. This can apply to employers and also to those who are self-employed.
If you have a Self-Managed Super Fund, the Australian Taxation Office have now released guidance on the process for accessing superannuation early from your SMSF.
How much can you take out?
You can apply to withdraw up to $10,000 of your superannuation before 1 July 2020.
You can also access a further $10,000 of your super from 1 July 2020 until 24 September 2020.
You can only make one withdrawal for each financial year, so if you choose to withdraw just $5,000 in the current financial year, then you can’t go back and make a second $5,000 withdrawal before 30 June 2020.
Similarly, if you choose to make a smaller withdrawal this year, the difference does not carry into next year. $10,000 is the maximum for each year.
Withdrawals are tax free and won’t be included in your taxable income for the year. They also will not affect any Centrelink or Veterans’ Affairs payments.
Satisfying early release requirements
To apply for early release of your superannuation, you must satisfy one or more of the following requirements:
- You are unemployed.
- You are eligible to receive a job seeker payment, youth allowance for job seekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance.
- On or after 1 January 2020, any of the following happened:
- You were made redundant.
- Your working hours were reduced by 20% or more.
- You were a sole trader and your business was suspended or your turnover decreased by 20% or more.
These are the only requirements that must be considered.
How to apply
You can apply through the myGov website at https://my.gov.au/.
After applying through myGov, the ATO will issue a determination advising of your eligibility to release an amount. Only once your Superannuation fund receives this determination, will the trustee be authorised to make the payment.
Other ways to access superannuation
If you don’t meet the requirements for these early withdrawals, you may still be allowed to withdraw some of your super due to other reasonings, such as
- Access on compassionate grounds
- Access due to severe financial hardship
- Access due to a terminal medical condition
- Access due to temporary incapacity
- Access due to permanent incapacity
- Your super balance is less than $200
Be sure to seek advice
Your superannuation is important for your retirement and making withdrawal should not be done lightly. You should seek professional advice before undertaking any withdrawal to ensure that you meet the criteria and that the withdrawal will not be adversely affecting
The Treasury website has further information that will be helpful.
The ATO website also has some detailed information.