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There Are Only A Few Reasons That Your Superannuation Can Be Accessed Early – Here’s What They Are

Last year, a number of Australians took advantage of the early access to their super that was a part of the financial support options offered by the government during COVID-19, and withdrew amounts to assist themselves. If individuals and sole traders had suffered financial hardship of at least 20 per cent due to loss of work or hours, they were able to access up to $10,000 from their retirement savings in the 2019-20 financial year. They were also able to access a further $10,000 during the second round of the scheme from 1 July 2020 – 31 December 2020.

This scheme is now closed, and Australians can now only access the funds within their superannuation fund under certain circumstances.

Access On Compassionate Grounds

Compassionate grounds will include needing money to pay for:

  • Medical treatment and medical transport for you or your dependant
  • Palliative care for you or your dependant
  • Making a payment on a home loan or council rates so you don’t lose your home
  • Accommodating a disability for you or your dependant
  • Expenses associated with the death, funeral or burial of your dependant

Access Due To Severe Financial Hardship

This is not a grounds that is administered by the ATO but rather by your super provider who must be contacted to request access to your super due to severe financial hardship.

You may be able to withdraw some of your super if you meet both these conditions:

  • You have received eligible government income support payments continuously for 26 weeks
  • You are not able to meet your reasonable and immediate family living expenses.

You can withdraw between $1,000 and $10,000, but only once in any 12 month period.

Access Due To A Terminal Medical Condition

A terminal medical condition may allow you to access your super if these conditions are met that proves its existence:

  • Two registered medical practitioners have certified, jointly or separately, that you suffer from an illness that is likely to result in death within 24 months of signing the certificate
  • At least one of the registered medical practitioners is a specialist practising in an area related to your illness or injury
  • The 24 month certification period has not ended

Access Due To Temporary Incapacity

If you are temporarily unable to work or need to work fewer hours because of mental health or physical condition, you may be able to access your super. This condition of release is generally used to access insurance benefits linked to your super account. Super payments will be received on a regular basis over the time that you are unable to work.

Access Due To Permanent Incapacity

Access in this instance is sometimes called a disability super benefit, and access to your super through this method generally occurs if you are permanently incapacitated. You must have a permanent physical or mental medical condition that is likely to stop you from ever working again in a job you were qualified to do by education, training or experience.

It can be received as either a lump sum or as regular payments (income stream)

Super Less Than $200

In the instance where your employment is terminated and the balance of your super account is less than $200, or you have found a “lost super” account with a balance less than $200, you may be able to access your super.

First Home Super Saver Scheme

Applying for the release of voluntary concessional and voluntary non-concessional contributions that you have made to your super fund since 1 July 2017 to help save for your first home is a valid reason for the early release of super.

You will have to meet eligibility requirements to apply for the release of these amounts. Under the First Home Super Saver Scheme, you can apply for a release of a maximum of $15,000 of your voluntary contributions from any one financial year, up to a total of $30,000 (but this amount is due to increase to $50,000 following an announcement in the May 2021 budget).

If you’re someone who often finds it difficult to make large lump sum payments for goods or services, you may want to consider looking into “Buy Now Pay Later” services.

Buy now pay later essentially means that, rather than paying in a full lump sum payment for a product or services rendered, there may be an option to pay through instalments of a certain amount over a set period to make the sum of the full amount in total. This method should allow you to pay in full for the product or service without overly straining your finances – you pay back what you can, as agreed upon when you begin the buy now pay later service.

Some popular buy now pay later services include Afterpay, Zip Pay, Brightepay, and some credit card networks such as  Mastercard and Visa, can offer buy now pay later arrangements.

Though it can be a convenient, immediate solution, it may be challenging to juggle the necessary repayments with other financial commitments. It’s not always the most appropriate method for people, and you should bear in mind your situation and ability in paying back the amounts. 

Before you sign up, keep in mind: 

  • It becomes easier to overspend with buy now pay later services, so know your limits on what you can and can’t afford.
  • You will be charged fees and costs to use the service, which can add up to a princely sum in and of itself.
  • Keeping track of your payments can be tricky if you’ve signed up for multiple services.
  • It could affect your loan applications for a car or mortgage as lenders consider buy now pay later spending just as much as your credit score.
  • Late repayments can appear on your credit report, which affects your ability to borrow money in the future.
  • Layby can be a cheaper alternative to buy now pay later, with no account-keeping or late fees to consider

If you are someone who could make use of BNPL services, you may wish to:

  • Ensure that when using the BNPL service, you stick to a set limit on what you spend so that you can comfortably pay it back later. 
  • Aim only to have one BNPL account at a time to manage payments through, rather than confuse yourself with multiple payments across different providers.
  • Always budget for bills, loan payments and BNPL payments, and 
  • Rather than use your credit card for payments to your BNPL account, consider linking to your debit account instead.

If you would like assistance in planning your financial future, help in managing your budget or some friendly advice, see us for a chat about what we can do for you.

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John Briggs

Jane Noller has been my accountant for the last 15 plus years. I can testify to Jane’s professionalism and expeditious manner in dealing with the day to day issues that surrounds our business accounting.

John Briggs

Registered Building Certifier