Yes, in certain circumstances like financial hardship or illness. The exact terms will depend on your individual superfund, but you will generally be required to prove that accessing your super is financially essential.
Read on for our complete guide to accessing your super account balance early.
When we think of superannuation, we usually think of an account balance paid after you reach retirement age. However, there are particular circumstances where you can successfully apply for early release of your super account balance.
These circumstances can include (but are not limited to):
You may withdraw some of your super if you’re experiencing severe financial hardship.
Unfortunately, a withdrawal for financial hardship is still subject to standard lump sum tax rates. This means anyone under 60 will be taxed between 17–22%, while those over 60 are exempt.
Any claim for financial hardship must be made through your super fund.
You can withdraw a portion of your super on compassionate grounds, such as:
You cannot withdraw your entire balance, only what you need to cover unpaid bills. A claim on compassionate grounds must be made through the ATO, not your super fund.
You can withdraw your super if a permanent disability means you’re unlikely to work again. This type of release is sometimes called a ‘disability super benefit’.
It’s helpful to know that you don’t have to prove that you’re unfit for all work—just work within your education, training and experience.
You can choose to receive your super as a lump sum or in regular payments. The exact amount of tax you’ll pay depends on whether you’re already receiving a disability payment and whether you’ve reached preservation age (that is, the retirement age where all people can legally access their super).
If you’re permanently incapacitated and looking to withdraw your super, we can help. Speak to one of our expert superannuation team today for free advice on your claim.
You may withdraw some of your super if you’re temporarily unable to work due to injury or illness. This also includes situations where you’re working fewer hours.
You will receive regular payments (known as an ‘income stream’) while you can’t work. Any super withdrawn is taxed at the regular rate.
You will need to make a temporary incapacity claim directly through your super fund.
You may be able to access your super balance early if you have a terminal illness.
To qualify you must get a certification (whether jointly or separately) from two registered medical practitioners. The certification must show that:
Your payment is tax-free if you withdraw a lump sum within 24 months of certification.
A terminal illness claim must be made through your super fund. If your fund does not allow early access due to a terminal illness, you can move your super to a different fund.
Your super benefit can also be released early if you require the money for:
Unless you have a valid reason (and sign-off from the ATO or your super fund), it is illegal to access your super balance early. Some promoters offer ‘early access’ by transferring your super into a self-managed fund. This is against the law and you can receive heavy penalties for participating. It’s always wise to speak to a lawyer before transferring your super between funds.
You do not need a lawyer to make a claim for early release of super. However, a lawyer can ensure you uncover all your extra super fund entitlements. This includes lucrative claims for Total and Permanent Disability (TPD) and income protection.
At Monaco Solicitors, we focus primarily on permanent incapacity and TPD. Our team have helped thousands of clients secure their maximum super fund benefits. Whether you’re looking to start a claim, unsure if your injury qualifies, or just after advice on your super benefits, get in touch today.