Q.What are the new rules surrounding early access to superannuation?
In a response to the current pandemic, the Government is allowing Citizens and Permanent Residents of Australia and New Zealand affected by the Coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21.
All eligible temporary residents are able to apply once to access up to $10,000 of super in 2019–20.
Eligibility for Citizens and Permanent Residents of Australia and New Zealand
As at 21 April 2020, the eligibility criteria to apply for early release for all Australian and New Zealand citizens and permanent residents, must satisfy any one of the following requirements:
- 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.
Eligibility for Temporary Residents
As at 21 April 2020, 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; your working hours have reduced to zero and you remain engaged with your employer.
- You are a temporary resident visa holder (excluding student or skilled worker visas) and you cannot meet immediate living expenses.
Will I be taxed?
If you are approved in accessing your superannuation early, you will not need to pay tax on amounts released and the money you withdraw will not affect Centrelink or Veterans’ Affairs payments.
What are the implications of accessing my super early?
It is important to keep in mind that, in apply for early release of your super, it will affect your super balance and may affect your future retirement income.
It may also affect income protection insurance life / total permanent disability insurance cover and insurance may no longer be available on accounts that:
- are fully withdrawn
- have a balance below $6,000
- are inactive low balance accounts.
To confirm this information, you will need to speak to your superannuation fund about the implications on your account if you were to apply for early release of you super.
How do I apply?
You can apply directly to the ATO through the myGov website: www.my.gov.au. It is free to do so.
Before applying, you should confirm that your personal details are correct on your MyGov account and with the ATO. This will assist in avoiding any delays by the ATO in processing your application.
You can only submit one application in each financial year:
- 2019–20, between 20 April and 30 June 2020
- 2020–21, between 1 July and 24 September 2020, for the 2020–21 year.
You do not need to attach evidence to support your application. However, the Government has recommended you keep records and documents to confirm your eligibility as this may be asked of you at a later stage.
There are penalties for making false and misleading statements.
It is recommended you consider whether you need to seek financial advice before submitting an application for early release of super.