COVID—19 update: Accessing your super early
On Sunday 22 March 2020, the Federal Government announced that eligible individuals will be able to access up to $10,000 of their super for the next two financial years to help ease the pressure of the economic impact of COVID—19.
We are currently working through how our processes, procedures and systems can support the changing super landscape. Our priority is to keep you informed about the changes, help you understand what the changes mean for you and provide support, so you can make the best decisions for your own personal circumstances.
While the Federal Government is still working through the details, please find some important information below, based on the Government’s announcement:
WHO WILL BE ELIGIBLE TO ACCESS THEIR SUPER?
In order to gain access to your super under the special COVID-19 provisions, you will need to meet one of the below requirements:
- You are unemployed, or
- You’re 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, or
- On or after 1 January 2020:
o you were made redundant; or
o your working hours were reduced by 20 per cent or more; or
o if you’re a sole trader—your business was suspended or there was a reduction in your turnover of 20 per cent or more.
You will also need to have accumulation-style super. Early releases cannot usually be made from defined benefit super.
HOW MUCH SUPER CAN BE ACCESSED?
If eligible, you can access up to $10,000 this financial year (2019/ 2020) and a further $10,000 next financial year (2020/ 2021) under the special COVID-19 provisions.
Please note most people will only be able to make one withdrawal per financial year, for example if you withdraw $8,000 mid—April, you are not eligible to access the remaining $2,000.
You will not need to pay tax on the super withdrawn and it will not affect your Centrelink or Veterans’ Affairs payments.
HOW TO APPLY
From mid—April, if you meet the eligibility requirements, you will be able to apply to the ATO through the myGov website: my.gov.au.
ACCESSING YOUR SUPER
Everyone’s situation and circumstances are different, so it’s important to consider the long-term implications on your retirement savings and what it might mean for you.
Speaking to a financial advisor may help you make an informed decision.
Please note there may be insurance implications if you choose to take money out of your super. For more information click here.