Normally you can’t access your superannuation until you reach your minimum retirement (preservation) age. But did you know there are certain circumstances under which you can access your superannuation early?
First, an early release of superannuation must be necessary and meet the minimum expenses required. You must also show that you can’t meet your expenses by any other means, such as existing savings or assets.
Applying for early release on compassionate grounds
Most superannuation funds will allow you to access a lump sum of your accumulated superannuation every 12 months on specified compassionate grounds. These are:
- To prevent the seizure and sale of the family home by your mortgage lender
- To meet medical, dental, disability or palliative care costs for you or a dependant (spouse or child)
- To meet death, funeral or burial costs
After compiling the required documentation supporting your claim, you must lodge your application with the Commonwealth Department of Human Services (DHS).
The DHS will review your application within 10 days of receiving all required information and documentation. You will be advised in writing of their decision on the release of your funds.
Superannuation funds released on compassionate grounds are taxed.
Applying for early release on severe financial hardship grounds
Provided you meet eligibility requirements, your superannuation fund may allow your early access to your superannuation in the case of severe financial hardship for ‘reasonable immediate family living expenses’:
- Loan repayments
- Car repairs
- Outstanding bills
- Outstanding rent
Applications are made direct to your superannuation fund, although you can apply to the DHS for a confirmation letter providing a record of your eligible income support (Centrelink) payments.
Any amount of superannuation released on grounds of hardship may incur fees imposed by your superannuation fund and is also subject to tax.
Applying for early release in the case of terminal illness
If you are certified as terminally ill, you must contact your superannuation fund to request the release of your accumulated superannuation. It must be paid as a lump sum and is tax-free, provided it is withdrawn within 24 months of certification of your terminal illness.