Accessing your super early. What you need to know.
Superannuation | 28/04/2020 |
5 min read
Updated information is available
-27 July 2020-
The Federal Government has announced an extension to the early access superannuation scheme.
Eligible Australians will be able to apply for up $10,000 of their superannuation until 31 December 2020. The original cut-off date was 24 September 2020.
Additional information can be found via the government’s latest fact sheet.
Applications for early access can be made via the My.Gov website.
Accessing your super early
Please refer to the update at the top of the page
The Federal Government recently introduced a new condition which allows for early release of super for people who have been financially affected by the coronavirus. Under this condition, you can receive a payment of up to $10,000 from your super in the current, 2019-20 financial year* and a further payment of up to $10,000 in the 2020-21 financial year*.
However, although these measures can offer financial relief now, there are some things you should consider before deciding if it is right for you.
If you access super early, what does it mean in retirement?
If you access $10,000 of your super
If you intend to retire at 65 years old, and you access $10,000 of your super today, below are some estimates of how much less you might have when you retire.
Retirement balance could be reduced by this amount
*Estimates are shown in today’s dollars, discounted using a wage inflation rate of 3.5% p.a. Other assumptions are: Starting account balance of $20,000. Starting salary of $70,000 which increases in line with wage inflation. Contributions are made at the Superannuation Guarantee rate (currently 9.5% of salary and allowing for legislated increases to 12%). Investment returns of 6.6% after tax and before fees. Combined percentage-based investment and administration fees of 0.88% p.a.. Combined insurance premiums and dollar-based administration fees are $203 p.a. and this amount increases in line with wage inflation.
Will my insurance cover through super be affected?
It depends on how much super remains in your account after you have accessed your super. You need to have enough in your super to cover your insurance costs and other fees.
If you withdraw all of your super, any insurance cover you may hold could be cancelled. If it is cancelled and you would like to apply for cover again in the future you can, but it means you will need to answer health questions and you’ll be subject to approval by the Insurer.
*Applications for a 2019-20 payment must be made by 30 June 2020 and applications for a 2020-21 payment must be made after 30 June 2020 but no later than 24 September 2020.
Should I apply for early access?
As an Equip member, if you meet the eligibility criteria, you can apply to access your super early. This may be helpful for people under extreme financial stress and those who have no other assets or sources of income to draw on.
However, before you apply for early access to your super, you should be aware that a withdrawal now could have quite an adverse impact on the amount you’ll have in your super when you retire. This will primarily be determined by your age, and the number of years you are expected to have remaining in your working life.
What if I’m a defined benefit member?
If you have defined benefits, you should contact us before you apply to find out if you’re eligible to access part of your super early.
Review your super balance
If you would like to review your current super balance, you can access it in the following ways:
• Visit our online portal at equipsuper.com.au/login and enter your member number and PIN, or
• Call our Helpline on 1800 682 626 and using the automated service. You’ll need to enter your member number and 4-digit telephone access code.
Consider financial advice
Before making a final decision about accessing your super early, we recommend you seek sound financial advice. Consider booking an appointment with one of our financial planners.
Additional early release information and FAQs
For more information about early access to super due to COVID-19, refer to the ATO website page and the Treasury fact sheet. You can also contact the Australian Taxation Office on 13 10 20 and read updated Q&As from the ATO. Additional information on how the ATO assess your application is available here.
If you have questions about your super or you would like to book a financial advice appointment, contact us on 1800 682 626 between 8am and 8pm AEST, Monday to Friday.
Timeline infographic supplied via APRA.
Early release information and FAQs
What is the COVID-19 early release program?
The Federal Government recently introduced a new condition which gives you early access to some of your super if you have been financially affected by the coronavirus.
Under this condition, eligible citizens and permanent residents of Australia or New Zealand can apply to receive a payment of up to $10,000 from your super in the current, 2019-20 financial year* and a further payment of up to $10,000 in the 2020-21 financial year*. These payments are tax-free.
Eligible temporary residents can apply for a payment of up to $10,000 from your super in the current, 2019-20 financial year*. These payments are tax-free.
*Applications for a 2019-20 payment must be made by 30 June 2020 and applications for a 2020-21 payment must be made after 30 June 2020 but no later than 25 September 2020.
Am I eligible for early release under the COVID 19 rules?
You must meet at least one of the following conditions to qualify for an early access payment from your super:
• you are unemployed; or
• you are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment, special benefit or farm household allowance
• on or after 1 January 2020:
(a) you were made redundant; or
(b) your working hours were reduced by 20% or more; or
(c) if you are a sole trader, your business was suspended or there was a reduction in your turnover of 20% or more.
If you’re a temporary resident you must meet at least one of the following conditions to qualify for an early access payment from your super:
• 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 and still employed but unable to meet immediate living expenses.
• You are a temporary resident visa holder (excluding student or skilled worker visas) and you cannot meet immediate living expenses.
How do I apply?
Applications can only be made via the ATO through the MyGov website.
Before you start the application process, you should:
• set up your myGov account and link it to the ATO
• have your Australian bank account information available – you will need this to complete your application and only Australian bank accounts are accepted
• check your super balance – your actual account balance may be higher or lower than that shown in ATO Online or in the early release application form.
How long before I receive my payment?
Most payments will be made in 5 business days after we have been notified that your application has been approved by the ATO.
It may take longer than 5 business days from the date of your application for the payment to reach your bank account. This is because:
• it may take 1-2 business days for us to be notified by the ATO.
• we may take up to 5 business days to process your payment.
• once payment is made, it may take a further 1-2 business days for the EFT to reach your account.
Once your application is approved by the ATO, you do not need to contact us for your payment to be made.
Where do I go for help with the process?
You will need to contact the ATO. Unfortunately, you are not able to apply through your super fund.