ACCESSING YOUR SUPER

ACCESSING YOUR SUPER

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 access 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 Australian Government Age Pension eligibility age.

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

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 childcare, 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

If you have reached preservation age plus 39 weeks and are not gainfully employed when you apply, there are no cashing restrictions.

If you are between preservation age and age 60 and fully retired, you can withdraw a lump sum taxfree up to a specified amount. (You are still able to return to work in future.) Alternatively, you can start a First Super Allocated Pension account, but any super you withdraw will be considered as income and subject to marginal tax rates.

From age 60 and over and fully retired, you can withdraw a lump sum of the amount you choose or start an Allocated Pension for a regular income stream. All benefit (super) payments and withdrawals are tax free if you are fully retired.  And again, there is nothing preventing you returning to work in the future.

Contact our Member Services team for more information 1300 360 988.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 Insurance and inactive member accounts for more details.

A super withdrawal on compassionate grounds must be for unpaid expenses that you have no other means of paying, including needing money 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
  • modifying your home or vehicle to accommodate your or your dependant’s severe disability
  • expenses associated with the death, funeral or burial of your dependant.

The amount you can withdraw is limited to what you’d reasonably need to cover these expenses. It’s important to note that this type of withdrawal is assessed and administered by the Australian Taxation Office (ATO), not your super fund.

The Australian 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 $50,000 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 are living and working in Australia, you may be able to use your KiwiSaver savings towards 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. Contact your super fund to find out more about requesting access.

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

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.

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

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

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.

Worked in NZ and now in Aus?

First Super is one of only a few super funds that accepts KiwiSaver transfers.

Importantly, they do not charge a fee for accepting your KiwiSaver into your First Super account. Save on fees and taxes. Bring your KiwiSaver Balance across the ditch with First Super. Join online or contact First Super Member Services: 1300 360 988

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 document contains general advice which has been prepared without taking into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and read the Product Disclosure Statement before making any investment decisions.  To obtain a copy of the PDS or Target Market Determination please contact First Super on 1300 360 988 or visit our website www.firstsuper.com.au.

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