Temporary Early Access to Superannuation
For those individuals facing significant financial adversity due to the Coronavirus, the Government is allowing them to access $10,000 of their superannuation before June 30, 2020 and a further $10,000 between July 1, 2020 and September 24, 2020. Amounts withdrawn do not need to be included in tax returns.
The primary purpose of superannuation is to save for your retirement and any withdrawals will impact on your future balance. Having said that, given the extraordinary current circumstances, making a withdrawal might be essential.
To be eligible for an early release of amounts from superannuation, Australian (and New Zealand) permanent residents must:
- Be unemployed, or
- Eligible to receive JobSeeker, Youth Allowance for jobseekers, parenting payment (includes single and partnered payments), special benefit or farm household allowance; or
- On or after 1st January 2020:
* You were made redundant; or
* Your working hours were reduced by 20 per cent or more; or
* For sole traders - your business was suspended or turnover has reduced by 20 per cent or more.
Note that extra criteria applies for all classes of temporary visa holders.
Application is through the myGov website directly to the ATO and will require you to certify that you meet the eligibility criteria. After processing, the ATO issues you with a determination and sends a copy to your superannuation fund so that they can release the money to you without having to apply separately. Self managed super funds have separate arrangements.
While withdrawing funds out of your superannuation fund is not ideal, it is a one-off opportunity to access funds you would not normally be able to access so it is something that should be considered.
To minimise the impact on your superannuation balance on retirement, you could consider salary sacrificing or contributing to your superannuation in the future to replenish the amount withdrawn in these circumstances. Please contact us if you are considering this and would like further advice.
This article forms part of our Business Accelerator Magazine. Download the latest edition HERE or browse other articles from this edition below:
- Post Pandemic – Survival Then Revival
- Are You Swimming Naked?
- Pivot, Adapt, Survive & Even Thrive - How to Pivot Your Business
- Working Remotely? The Ins and Outs of Claiming Home Office Expenses
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Disclaimer: This newsletter contains general information only. No responsibility can be accepted for errors, omissions or possible misleading statements. No responsibility can be accepted for any action taken as a result of any information contained in these articles. It is not designed to be a substitute for professional advice and does not take into account your personal circumstances.