Accessing your Superannuation early

We have recently had an increased amount of enquiries relating to early access to superannuation for the purpose of debt reduction or financial hardship. While you may be eligible to access your superannuation if you are suffering ‘financial hardship’ it is important to understand the eligibility criteria and in what circumstances you may be able to apply for early access to your superannuation.

The first step is to determine if you satisfy the ‘severe financial hardship’ rules. The definition of ‘severe financial hardship’ is very specific and specifies that you will need to have received government income assistance for 26 consecutive weeks and can show that you are unable to meet reasonable and immediate family living expenses, from here you will be able to apply to access a portion of your superannuation. The minimum amount that can be withdrawn from your superannuation fund is $1,000 and the maximum amount is $10,000. If you are eligible for early access to your superannuation under financial hardship it is important to note that you can make only one withdrawal in any 12 month period.

Other important Points:
  • Typically superannuation withdrawals due to severe financial hardship are paid and taxed as a normal superannuation lump sum.
  • You may belong to a superannuation fund that does not permit early access to your superannuation even if you satisfy the severe financial hardship rules.
  • Some organisations claim to offer early access to your super savings by transferring your super balance into a self-managed super fund. Watch out as such schemes are illegal and heavy penalties apply for those who participate.
  • To apply for early access to your superannuation due to financial hardship, contact your super fund or your financial adviser.
If you are not eligible for early access to your superannuation but require assistance with your debt and cash flow management there may be other ways to maximise your financial position. Speak with your financial adviser and gain an understanding of your financial situation and the options available to you.

Elle Ross
Equitem Financial Strategist
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