Accessing super early is allowed in some circumstances, with a number of conditions. However illegal super early access schemes can result in stiff fines or more severe penalties.
Generally in order to access superannuation generally a condition of release must be met. The conditions relevant for accessing super early include:
- Compassionate grounds
- Severe financial hardship
- Terminal medical conditions
- Temporary incapacity
- Permanent incapacity
- Former temporary resident
- Balances of $200 or less
All the conditions of release can be found in Schedule 1 of the Superannuation Industry (Supervision) Regulations 1994 (SISR).
Accessing super early: conditions of release
The compassionate grounds for accessing super early are set out in SIS regulation 6.19A(1), and include such things as:
- paying for medical treatment or medical transport “for the person or a dependant ”
- payment of a loan where the place of residence is at risk of foreclosure
- to pay for expenses related to a dependants’ palliate care, death, funeral or burial
Since 1 November 2011 applications for accessing super early on compassionate grounds have been administrated by the Department of Human Services (DHS).
The DHS lists the requirements for applying for the different compassionate grounds for accessing super early:
- medical treatment or transport
- mortgage assistance
- modifications to your home or motor vehicle
- palliative care
- funeral expenses for a dependant
According to the DHS, accessing super early on compassionate grounds it generally only available to:
- Australian citizens
- New Zealand citizens
- Permanent residents of Australian
In other words the compassionate grounds applies to people otherwise bound by the full preservation requirements. Temporary residents are able to apply to receive their superannuation after leaving Australia.
Severe financial hardship
Applications for accessing super early on the grounds of severe financial hardship are made directly to the super fund.
The definition of severe financial hardship is set out in s6.01 of the SISR. It requires that a person has been receiving Commonwealth income support payments for a “continuous period of 26 weeks” and “that the person is unable to meet reasonable and immediate family living expenses.” There is also another eligibility criteria requiring the person to have reached their preservation age plus 39 weeks, along with some other conditions
Severe financial hardship is limited to a single lump sum of between $1,000 and $10,000 in a 12 month period, unless the person has less than $1,000 in their super fund.
Terminal Medical Condition
Accessing super early is allowed where the definition of Terminal Medical Condition is met, which is defined by SIS regulation 6.01A. In summary it requires two doctors, at least one being a specialist in a relevant field, to certify that an illness or injury is “likely to result in the death of the person within a period…that ends not more than 12 months after the date of the certification.”
Temporary incapacity for early access to super is also defined by SISR 6.01, as:
in relation to a member who has ceased to be gainfully employed (including a member who has ceased temporarily to receive any gain or reward under a continuing arrangement for the member to be gainfully employed), means ill-health (whether physical or mental) that caused the member to cease to be gainfully employed but does not constitute permanent incapacity.
An application for this type of early release is made to the super fund.
Accessing super early is also allowed under the definition of ‘permanent incapacity’. APRA, in the Payment Standards for Regulated Superannuation Funds, says that superannuation can be accessed early under ‘permanent incapacity’ where:
- Allowed by the rules of the fund
- The member has “ceased gainful employment”
- The fund trustees are “reasonably satisfied that the member is unlikely, because of physical or mental ill-health, to ever again engage in gainful employment for which the member is reasonably qualified by education, training or experience”
Former temporary resident
Accessing super early is allowed for some former temporary residents under a Departing Australia Superannuation Payment.
Balances of less than $200
There is also an option for accessing super early where the preserved balance is less than $200 and there has been “termination of gainful employment with a standard employer-sponsor of the regulated superannuation fund” or for ‘lost members’.
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