EARLY RELEASE OF SUPERANNUATION

Eligible citizens and permanent residents of Australia or New Zealand can apply for up to $10,000 in 2019–20 and up to a further $10,000 in 2020–21.

Roland Blazevic - Superfund Manager

By Roland Blazevic

If you have been financially affected by COVID-19, you may be able to access some of your superannuation early.

Eligible citizens and permanent residents of Australia or New Zealand can apply for up to $10,000 in 2019–20 and up to a further $10,000 in 2020–21.

Eligible temporary residents are able to apply once to access up to $10,000 of super in 2019–20.

Applications can be submitted online through myGov:

  • until 30 June 2020 for the 2019–20 year, and
  • between 1 July 2020 and 24 September 2020, for the 2020–21 year.

You will not need to pay tax on amounts released and will not need to include these amounts in your tax return.

Eligibility

Citizens and permanent residents of Australia and New Zealand

To be eligible for early release of super, a citizen or permanent resident of Australia and New Zealand must be in one of the following circumstances:

  • You are unemployed.
  • You are eligible to receive one of the following;
  • jobseeker payment
  • youth allowance for jobseekers (unless you are undertaking full-time study or are a new apprentice)
  • parenting payment (which includes the single and partnered payments) special benefit
  • farm household allowance.
 

On or after 1 January 2020 either:

  • you were made redundant
  • your working hours were reduced by 20% or more (including to zero)
  • you were a sole trader and your business was suspended or there was a reduction in turnover of 20% or more.
 

Temporary residents

To be eligible for early release of super in 2019–20, temporary residents must be in one of the following circumstances:

  • You hold a student visa that you have held for 12 months or more and you are unable to meet immediate living expenses.
  • You are a temporary skilled work visa holder and still employed but unable to meet immediate living expenses.
  • You are a temporary resident visa holder (excluding student or skilled worker visas) and you cannot meet immediate living expenses.

 

Assessing your eligibility

You do not need to attach evidence to support your application. However, you should keep records and documents to confirm your eligibility.

It is important that you assess your eligibility accurately. The ATO are administering this measure on behalf of all Australians and will manage the eligibility criteria with strict guidelines to support those financially affected by COVID-19. There are penalties for making false and misleading statements.

You can’t access your super early for a dependant. If your dependant is financially affected by COVD-19, they must apply themselves.

You can only submit one application for COVID-19 early release of super per

financial year. You are still able to apply for COVID-19 early release of super if you have previously accessed your super early in other circumstances.

Implications of accessing your super early

Accessing your super early will affect your super balance and may affect your future retirement income.

Canstar has calculated the following potential impact on retirement balances if a $20,000 amount (in total) is withdrawn ($10,000 this financial year and $10,000 the next financial year);

  • A 20-year-old who accesses the full $20,000 available under the scheme could lose more than $120,000 from their retirement balance.
  • A 30-year-old who accesses $20,000 from super now could lose about $100,000 when they hit retirement
  • A 40-year-old could lose more than $63,000 from their retirement balance.

Withdrawing superannuation may also affect your:

  • income protection insurance
  • life / total permanent disability insurance cover.

Insurance may not be available on accounts that:

  • are fully withdrawn
  • have a balance below $6,000
  • are inactive low balance accounts.

You should consider whether you need to seek financial advice before submitting your application for early release of super.

Before you apply

Before you start the application process, you should:

  • set up your myGov account and link it to the ATO
  • have your Australian bank account information available – you will need this to complete your application and only Australian bank accounts are accepted
  • check your super balance – your actual account balance may be higher or lower than that shown in ATO Online or in the early release application form.

There are four ways you can check your super balance:

  • Check your total superannuation balance in ATO online services. There will be an ‘as at’ or ‘effective’ date for the balance. In a lot of cases, it will be 30 June 2019 as funds are only required to report to the ATO once a year. This means your account balance may have changed since it was last reported to ATO, and may be higher or lower than shown on ATO online or in the early release application form.
  • If you have access to your super fund’s online member portal, you can log on and check your current account balance there. It might be a good time to establish a login to your fund portal if you haven’t already.
  • Check the last statement that your fund issued to you. This might be by paper or email.
  • Call your fund, but understand that they have had a large increase in members calling and there could be delays in having your call answered
  • If your fund is a state-administered fund, you will need to confirm whether they’re allowed to release super due to COVID-19, before you submit an application.
 

Submit an application

Applications for early release of superannuation are accepted through ATO online services via myGov.

You can only submit one application for COVD-19 early release of super in each financial year:

  • 2019–20, between 20 April and 30 June 2020
  • 2020–21, between 1 July and 24 September 2020 (Australian and New Zealand citizens and permanent residents only).

This is even if the total amount you request to be released, or the actual amount released by your fund, is less than $10,000. For example, if you request $8,000, you cannot make another application to request the additional $2,000.

The application form on myGov will display all your superannuation accounts, as reported to the ATO by your funds. You can request the release of your super from up to five super accounts. For example, if you want to receive a total of $10,000 you can request $5,000 from one fund and a second $5,000 from another fund. This must be done within one application form.

 

After you apply

It will take the ATO up to four business days to process your application and send your outcome letter to your myGov inbox. You may also receive an SMS notification.

If you receive a notification from the ATO and haven’t applied to access your super early, you need to call your fund or the ATO as soon as possible.

If you have an Australian Prudential Regulation Authority (APRA) fund and your application is approved, you do not need to contact your fund. Your fund will make the payment to you without you needing to apply to them directly.

If your fund is an SMSF, you will need to let them know that you have received the letter of approval from the ATO so they can make the payment to you.

Be aware of scams and schemes

Early access of your super is a free government service to help and support you during the impacts of COVID-19. Be aware of scams and schemes asking you to pay to release your super.

We’re concerned about scams or schemes where people:

  • impersonate the ATO, or a trusted organisation like your super fund, to steal your money or personal identifying information
  • approach you and charge you for services that are free, like gaining early access to your superannuation.

If you receive a phone call, text message or email offering to help you release your super early, do not:

  • provide your personal information
  • click on any links (the ATO will never include hyperlinks to a login page)
  • share your myGov login details with anyone, under any circumstances, including your tax agent.
 
 
If you would like to discuss accessing your super please contact Richard or Roland in our office. 

Disclaimer

Richard E Suttie Pty. Ltd. Trading as Suttie Financial Group.

  • 03 9417 3511
  • enquiries@respl.com.au
  • Level 1/1G Marine Parade Abbotsford 3067 Vic

Designed by  BA Creative