ACCESSING YOUR SUPER EARLY

Super is a long-term investment for your future.

That’s why the Australian Government has certain conditions you need to meet before you can access it.

These include:

You can start accessing your super once you reach your preservation age. Your preservation age varies depending on your date of birth and it is not the same as the government Age Pension eligibility age.

The table below shows your preservation age, depending on when you were born:

However, if you want to withdraw your super as a cash lump sum, you need to also meet a condition of release. These conditions include:

  • Reaching preservation age and fully retiring;
  • Turning 60 and ceasing employment; or
  • Turning 65 (even if you’re working).

What if I have reached my preservation age but I’m still working?

If you are below age 65 and have reached your preservation age but are still working, you can open a First Super Transition to Retirement Pension account. This will supplement your income while reducing your work hours, may boost your super account balance and may be an effective way to pay less tax.

If you’re struggling financially, you may be eligible to access your super on the grounds of severe financial hardship.

IF YOU ARE UNDER THE PRESERVATION AGE

You can apply if:

  • you are receiving an eligible Commonwealth income support payment* from either Centrelink or the Department of Veterans’ Affairs (DVA) (depending on which body makes your income support payments) for a continuous period of 26 weeks; and
  • you are unable to meet immediate family living expenses**.

* A Commonwealth Government income support payment is an income support supplement, service pension, social security benefit or social security pension.

** Immediate family living expenses include household expenses, rent and rental bond, child support and child care, debts, car repair bills, health costs and veterinary bills and school fees.

How much of my super benefit can be released?

If you meet the above conditions, you can apply for one single payment in any 12-month period. The minimum payment is $1,000 (unless your balance is less than this amount) and the maximum payment is $10,000 (before tax).

Will you be taxed on your withdrawal?

Yes. A severe financial hardship withdrawal is paid and taxed as a normal super lump sum payment. However, if you are under 60 years old this is generally taxed between 17% and 22%. If you are older than 60 years old, you will not be taxed. The ATO website has more details on access due to severe financial hardship.

IF YOU ARE AGED OVER THE PRESERVATION AGE

You can apply if:

  • have reached your preservation age plus 39 weeks;
  • are not be gainfully employed (full-time or part-time) at the date of this application; and
  • have been receiving a Commonwealth income support payment for a continuous period of 39 weeks since reaching preservation age.

How much of my super benefit can be released?

If you meet the above conditions, there is no maximum limit to you claim if you are over your preservation age.

Will you be taxed on your withdrawal?

Yes. A severe financial hardship withdrawal is paid and taxed as a normal super lump sum payment. However, if you are under 60 years old this is generally taxed between 17% and 22%. If you are older than 60 years old, you will not be taxed. The ATO website has more details on access due to severe financial hardship.

IMPORTANT CONSIDERATIONS

Before making a claim it’s important to consider the following:

  • If you’re a temporary resident in Australia, you won’t be eligible to apply for a payment on severe financial hardship grounds.
  • If you want to keep your First Super account open, you must have enough money in it to cover administration and investment fees.
  • If you have insurance cover, you need to leave enough money in your super account to pay insurance fees. If you have insufficient funds to cover this cost, your insurance will end.
  • If no contributions are received into your super account for 16 months, by law First Super would be required to cancel your insurance cover automatically. See the Insurance and inactive member accounts web page for more details.

To access your super on compassionate grounds, you’ll need to meet the conditions specified by Australian Taxation Office (ATO). It must relate to paying or meeting an expense for:

  • medical or dental treatment, or transport to and from these treatments for you or a dependant for a life-threatening illness or injury, an acute or chronic physical pain, or an acute or chronic mental condition;
  • assistance with mortgage payments to prevent your lender selling your home;
  • modifications to your home or motor vehicle if you or a dependant has a severe disability;
  • palliative care for you or a dependant due to a terminal medical condition; and/or
  • expenses relating to a death of a dependant (e.g. funeral expenses)

For more information read the Accessing Super Early fact sheet. The ATO website has more details on Early access on compassionate grounds webpage.

The Federal Government introduced the First Home Super Saver (FHSS) scheme to help Australians save for their first home.

You can make voluntary contributions into your super account, a maximum of $15,000 per financial year, with up to a total of $30,000 across all years. Then withdraw that money (voluntary contributions only) as a deposit on your first home.

To be eligible for release of the FHSS scheme you must:

  • be aged 18 years or older;
  • have never owned a property before in Australia;
  • not be in the process of using FHSS to purchase other property; and
  • have not requested a release of FHSS funds for a home purchase previously.

If you’ve previously owned property in Australia, and experienced financial hardship that resulted in a loss of ownership of a property, you may still be eligible to participate in the FHSS scheme (subject to approval from the ATO). You can apply for a ‘determination’ to the ATO to find out the maximum amount that can be released under the FHSS.

If you are diagnosed with a terminal illness or permanently incapacitated, you may be able to claim some or all of your super before your preservation age.

A terminal medical condition exists if all these conditions are met:

  • two registered medical practitioners have certified, jointly or separately, that you suffer from an illness or injury that is likely to result in death within 24 months of the date 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.

In this case, to request access to your super contact our Member Services Team directly on 1300 360 988 or email.

The ATO website has more details on Access due to a terminal medical condition webpage.

If you have worked and earned super while visiting Australia on a temporary working visa, you can apply to have this super paid to you as a departing Australia superannuation payment (DASP) after you leave.

You can claim a DASP if the following apply:

  • you accumulated superannuation while working in Australia on a temporary resident visa issued under the Migration Act 1958 (excluding Subclasses 405 and 410)
  • your visa has ceased to be in effect (for example, it has expired or been cancelled)
  • you have left Australia
  • you are not an Australian or New Zealand citizen, or a permanent resident of Australia.

Important: Super you access as a DASP will be taxed at 65% if you’ve been paid any of that super while on a subclass 417 or 462 visa or an associated bridging visa. Otherwise, tax applied is at a lower rate.

HOW TO CLAIM YOUR SUPER?

If you’re eligible you can submit an application via:

For more information, see the Departing Australian Superannuation fact sheet.

What if I’m an Australian or New Zealand citizen, or a permanent resident of Australia?

Australian and New Zealand citizens, and permanent residents of Australia aren’t eligible for the DASP.

Australian citizens and permanent residents heading overseas remain subject to the same rules as those living in Australia, even if you leave Australia permanently. You cannot access your super until you reach your preservation age and retire or satisfy another condition of release.

However, individuals permanently moving to New Zealand may be eligible to transfer their super to a KiwiSaver account. For information on transferring your super to a KiwiSaver account visit our Transfers to a KiwiSaver scheme webpage.

This is a sponsored advertising promotion by First Super Pty Limited (ABN 42 053 498 472, AFSL 223988) as trustee of First Super (ABN 56 286 625 181).  This publication may contain general advice which has been prepared without taking into account your objectives, financial situation or needs. You should consult the Product Disclosure Statement (PDS) firstsuper.com.au/pds before making any investment decision. Before making a decision to combine your superannuation, you should consider any costs, change to insurance cover or loss of benefits that may apply and, if necessary, consult a qualified financial adviser. Past returns are not a reliable indicator of future returns. Content was accurate at the date of issue in July 2020, but may subsequently change. Please contact First Super on 1300 360 988 for updated information or to obtain a copy of the PDS. No commissions or fees are paid to NZ Relo as part of this promotion, apart from advertising costs.

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