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Coronavirus early access to super

If you've lost work or been made redundant due to coronavirus you could be eligible to access up to $20,000 from your super tax free, but should you?

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Australian workers and sole traders who've lost part or all of their income due to the ongoing coronavirus pandemic could be eligible to access up to $20,000 from their superannuation early. This includes up to $10,000 before 30 June 2020 and another $10,000 before 30 December 2020.

If you didn't withdraw money in the first round, you're only able to withdraw a maximum of $10,000 in round two if eligible. So you can't withdraw $20,000 between now and 30 December 2020, even if you didn't withdraw any money in round one.

This page will explain who is eligible to withdraw their super early, how to do it and the risks that come with doing so. We'll also answer some of the most common questions you're asking about this scheme.

warningBeware of scams! Scammers are cold-calling Australians and sending unsolicited emails and text messages about accessing their super early. The ATO and your super fund will never contact you out of the blue about accessing your super early. Don't give your personal super details out and don't click on any links claiming to be taking you to the myGov site or your super fund's site.

Who can access their super early due to Coronavirus?

This initiative is intended for Australians who are either already unemployed and struggling to find work, or have recently lost a job or income as a direct result of the coronavirus pandemic. If you're a New Zealand citizen or a temporary resident in Australia you could also be eligible.

Australian and New Zealand citizens

Citizens and permanent resident of Australia and New Zealand need to meet at least one of the following eligibility criteria to access your super early as part of this scheme:

  • You're unemployed
  • You're eligible to get a job seeker benefit, youth allowance for jobseekers, parenting payment or farm household allowance
  • You've been made redundant or had your working hours reduced by 20% or more since 1 January 2020
  • You're a sole trader and you've had to pause your business operations, or your turnover has fallen by 20% or more, since 1 January 2020

Temporary residents

If you're not a permanent resident or Australian citizen, you could still be eligible to access your super early under this scheme. According to the ATO, temporary residents who can't meet immediate living expenses also need to meet at least one of the following eligibility criteria to access their super early:

  • You're on a student visa that you've held for more than 12 months
  • You're on a temporary skilled work visa and still employed
  • You're on a temporary resident visa
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How much of your super can you access?

If you're eligible, this package allows you to access up to $20,000 from your super. You could have accessed $10,000 from your super in the 2019-20 financial year (that is, before 1 July 2020). You'll also be able to access an additional $10,000 after 1 July 2020 until 30 December 2020

Note that these are the top limits of how much you can access if you need to, but you don't need to withdraw the full amount. If you only need to access a few thousand dollars, for example, you can apply to withdraw this amount instead of the full $10,000 each financial year.

If you didn't withdraw anything in the first round before 30 June 2020, you can't now choose to withdraw $20,000 in round two. You can only withdraw a maximum of $10,000 in round two (that is before 30 December 2020).

How do you apply to access your super early?

Follow these four steps to apply:

  1. Go to MyGov. Log into your MyGov account online and select the options to apply for early access to your super.
  2. Complete the application. Complete the application for online to determine your eligibility and how much you'd like to access from your super.
  3. Assessment. The ATO will assess your application and, if you're eligible, the ATO will advise your super fund that it can release that money to you.
  4. Receive your money. Your super fund will then need to release the money into your nominated bank account.

Should I access my super early?

Accessing your super early as part of this scheme is completely voluntary, and you're not forced to do it unless you feel it's necessary. While there may be benefits to doing this there are also significant risks.

CEO of The Australian Institute of Superannuation Trustees Eva Scheerlinck fears that accessing super now will have a bigger impact on someones retirement than they may realise. "Accessing super when markets are low will crystallise losses and represents minimal short-term gain with a significant long-term cost."

Potential benefits

  • If you're in severe financial hardship, accessing a small part of your super now could help you stay on top of your bills and repayments.
  • Withdrawing your super is tax free.
  • If you don't end up needing the money you can add it back into your super via a voluntary contribution later.

Risks

  • Your superannuation is there to help fund your retirement and by accessing some of it now, you're taking that money (and more) away from your future self. The money in your super benefits from compounded investment returns over the long term. That $10,000 today could be worth several times that by the time you retire. If you're in your 20s, it could be worth more than $100,000 by retirement.
  • Super funds have fallen this quarter because of the huge losses we're seeing in the stock market. However, these losses are 'on paper' at this stage, and only realised when you sell. Anyone planning to switch their super investment options or withdraw some of their super now is locking in that loss of capital.
  • Taking that money out of your super now means you also risk missing out on the potential market rebound that could see the money grow well over $10,000.

I need some support - what other options do I have?

If you're struggling financially because of the coronavirus pandemic but you don't want to withdraw from your super, there are some other initiatives in place. Check if you're eligible for mortgage repayment support, help with your utility bills, support for casual workers, and see if any of these financial support measures can help.

Does this affect my credit score or future borrowing power?

The money you withdraw from your super isn't a form of credit, so it won't be included in any official credit report. If you apply for a home loan in the near future, the lender may potentially be able to see that you've accessed the money from your super if they look at your transaction history. However, it's highly unlikely that lenders will look poorly on anyone who has accessed their super early to pay for essential bills and expenses. So it won't impact your borrowing capacity.

"It is highly unlikely that withdrawing money out of superannuation will impact future loan applications. The banks are well aware of the financial impact during COVID-19 and will make exceptions for temporary solutions that had to be put in place by customers during this difficult time," said mortgage broker Marissa Schulze.

What are the tax implications?

You won't need to pay any tax on the money you withdraw from your super, as it's already been taxed at the concessional tax rate of 15%. Therefore you don't need to include this money in your taxable income when you lodge your tax return this year.

However, if you deposit the money into a savings account that you then earn interest on, you will be required to pay tax on the interest earned.

Other ways to save

Taking money out of your super is a choice that only you can make. Taking money from your super now will impact your future retirement savings. While it may not provide any extra money in your pocket right now, switching to a high-performing, low-fee super fund now can save you thousands of dollars in fees and help you retire with more. If you're interested in finding a new funds, you can see some of our best super fund picks to help get you started.

If you've decided you don't want to withdraw from your super early, take a look at some other options which could help you save money. Managing your daily expenses, as well as looking for ways to save your current bills is a great place to start.

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65 Responses

  1. Default Gravatar
    KenOctober 7, 2020

    Hi, I have about a $140,000 in super. I’m 55 and know I will never work again. Is it possible to have my super released earlier than 60? My wife is on approx. 100k a year. Regards.

    • Avatarfinder Customer Care
      TeyOctober 8, 2020Staff

      Hi Ken,

      Thank you for reaching out to Finder. Hope you are doing well.

      In general, you can withdraw your super when you turn 65 (even if you haven’t retired), when you reach preservation age and retire, or under the transition to retirement rules, while continuing to work. 

      There are very limited circumstances where you can access your super early. These circumstances are mainly related to specific medical conditions, severe financial hardship, COVID-19, or the First home super saver scheme.

      To get your super released early you must meet 1 of these eligibility requirements:
      >be in severe financial hardship
      >have a terminal illness
      >be a temporary resident
      >have less than $200 in your super fund
      >meet compassionate grounds

      To apply for early super due to COVID-19, you must satisfy one or more of the following requirements:
      >you are unemployed
      >you are eligible to receive one of the following:
      -JobSeeker payment
      -Youth Allowance for job seekers (unless you are undertaking full-time study or are a new apprentice)
      -Parenting payment (which includes the single and partnered payments)
      -Special Benefit
      -Farm Household Allowance
      >on or after 1 January 2020 either:
      -you were made redundant
      -your working hours were reduced by 20% or more (including to zero)
      -you were a sole trader and your business was suspended or there was a reduction in turnover of 20% or more (partners in a partnership are not eligible unless the partner satisfies any other of the eligibility).

      If you’re eligible and want to access COVID-19 early release of super in the 2020–21 financial year, you can submit an application between 1 July 2020 and 31 December 2020 – even if you have applied in 2019–20 financial year.

      If you are eligible for this new ground of early release, you can apply directly to the ATO through the myGov website. You will need to certify that you meet the eligibility criteria relevant to your circumstances. Please note that accessing your super early will affect your super balance and may affect your future retirement income. Consider whether you need to seek financial advice before starting your application.

      I hope this helps you. Feel free to contact us back for further inquiries you may have and we’ll be glad to help you.

      Cheers,
      Tey

  2. Default Gravatar
    BenJuly 1, 2020

    Question, I started up a partime business and also have a full time job. I have an ABN and bought stock, ect and started to operate but closed down/suspended the business due to Covid. but I am working on a full time basis in my day job. Am i classified as a sole trader that lost 20% income (as i don;t receive any income in my business)

    • Avatarfinder Customer Care
      FayeJuly 2, 2020Staff

      Hi Ben,

      Thanks for reaching out to Finder.

      Sorry to hear that your business has to closed down due to COVID-19. Kindly refer to the eligibility criteria listed above. If you satisfy one of the circumstances outlined in the criteria you will be eligible for the early release of super.

      If you are eligible, you can can submit an application between 1 July 2020 and 24 September 2020 through ATO online services in myGov.

      I hope this helps.

      Keep safe!
      Faye

  3. Default Gravatar
    AndrewJune 27, 2020

    My hours have been cut by 40% but I’ve been using annual leave to top up my wage can i still access my super through covid19 crisis ?

    • Avatarfinder Customer Care
      JackieJune 29, 2020Staff

      Hi Andrew,

      Thanks for your inquiry.I hope all is well for you.

      Generally, if you are an Australian citizen, you can apply for the early release of superannuation due to COVID-19 provided you satisfy one or more of the following requirements:

      • You are unemployed.
      • You are eligible to receive a job seeker payment, youth allowance for Jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance.
      • On or after 1 January 2020, either
      – you were made redundant
      – your working hours were reduced by 20% or more
      – if you were a sole trader, your business was suspended or there was a reduction in your turnover of 20% or more.

      As a reminder, super is designed to help you save for retirement. Please consider all your options and check if there are other financial assistance that may be available to you before you apply for COVID-19 early release of super.

      Hope this helps.

      Regards,
      Jackie

  4. Default Gravatar
    LornaJune 15, 2020

    Can you help me how to apply early release from my super. Though I am still working I am still behind my bills.Is there any possibility for me to apply early release
    from my super?

    • Avatarfinder Customer Care
      JoyceJune 16, 2020Staff

      Hi Lorna,

      I hope this email finds you well. I understand you would like to know how to apply for an early release of your super.

      Early release of super is an initiative to help people who are financially affected by COVID-19. You can apply for early release of super provided you are an Australian or New Zealand citizen or a permanent resident and you satisfy one or more of the following requirements:

      -You are unemployed
      -You are eligible to get a job seeker benefit, youth allowance for jobseekers, parenting payment or farm household allowance
      -You have been made redundant or had your working hours reduced by 20% or more since 1 January 2020
      -You are a sole trader and you had to pause your business operations, or your turnover has fallen by 20% or more, since 1 January 2020

      As a reminder, super is designed to help you save for retirement. Before you apply to access your super, please consider all your options and check if there are other financial assistance that may be available to you.

      I hope this helps.

      Cheers,

      Joyce

  5. Default Gravatar
    PatiJune 10, 2020

    Hi! Some of my friends claim part of the $10,000 of super but they are still working 40 hours and overtime. Is this possible?

    • Avatarfinder Customer Care
      MaiJune 11, 2020Staff

      Hi Pati,

      Thank you for reaching out to Finder.

      Please note that only one of the below needs to be meet to be eligible to receive super early.

      * You’re unemployed
      * You’re eligible to get a job seeker benefit, youth allowance for jobseekers, parenting payment or farm household allowance
      * You’ve been made redundant or had your working hours reduced by 20% or more since 1 January 2020
      * You’re a sole trader and you’ve had to pause your business operations, or your turnover has fallen by 20% or more, since 1 January 2020

      If your friends are able to receive their super early despite not having reduced working hours and still working overtime, possible that they were able to meet other eligibility.

      For more information about early access to super, you may refer to ATO as well.

      Hope this helps and stay safe.

      Kind Regards,
      ​Mai

  6. Default Gravatar
    CherylJune 9, 2020

    Hi, my husband’s employment has been impacted by the virus, am I able to withdrawn from my super to aid in the support of our family?

    • Avatarfinder Customer Care
      FayeJune 10, 2020Staff

      Hi Cheryl,

      I am sorry to hear that your husband’s employment was affected by the COVID-19 pandemic.

      Early release of super is a measure to specifically help people who are financially affected by COVID-19. You can apply for early release of super provided you are an Australian or New Zealand citizen or a permanent resident and you satisfy one or more of the following requirements mentioned above.

      As a reminder, super is designed to help you save for retirement. Before you apply to access your super, please consider all your options and check if there are other financial assistance that may be available to you.

      I hope this helps.

      Cheers,
      Faye

  7. Default Gravatar
    Meskel AssefaJune 7, 2020

    Can I apply for the temporary early release of super while I’m stuck overseas due to the coronavirus pandemic?

    • Avatarfinder Customer Care
      MeiJune 7, 2020Staff

      Hello Meskel,

      I see you’re checking if you can have early access to your super while overseas.

      If you’re an Australian citizen or permanent resident, your super will remain subject to the same rules. What that means is that in most instances you generally won’t be able to access your super until you reach your preservation age, which will be between 55 and 60, depending on when you were born.

      ATO stated that Australian and New Zealand citizens and permanent residents, as well as temporary residents, are eligible for early access to super. Provided that they meet other criteria under these very limited circumstances. These circumstances are mainly related to specific medical conditions, severe financial hardship, COVID-19, or the First home super saver scheme.

      Since the reason for early access is due to the pandemic, it’s recommended for you to directly get in touch with your super fund provider for clarification, more so if you are an Australian citizen overseas.
      You can read more about who can have early access to super and how here on Services Australia’s page.

      Hope this helps. Feel free to contact us back for further inquiries you may have.

      All the best,
      Mei

  8. Default Gravatar
    MariaJune 7, 2020

    Under the new COVID-19 Super release, how do they determine if you’re eligible? I have lived overseas for 8 years so haven’t submitted a tax return in awhile etc. I want to make sure I can get the required paperwork to prove I meet the criteria before I bother trying to do it.

    • Avatarfinder Customer Care
      JoyceJune 7, 2020Staff

      Hi Maria,

      I hope all is well with you. I understand you would like to know if eligibility requirements for early access to your super.

      Generally, if you are an Australian citizen, you can apply for the early release of superannuation due to COVID 19, provided you meet the following requirements:

      -You are unemployed.
      -You are eligible to receive a job seeker payment, youth allowance for Jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance.
      -On or after 1 January 2020, either you were made redundant; your working hours were reduced by 20% or more; if you were a sole trader, your business was suspended or there was a reduction in your turnover of 20% or more.

      According to ATO, you will need an Australian bank account and only Australian bank accounts are accepted.You will not need to pay tax on amounts released and will not need to include it in their tax return. The application is available through ATO online services in myGov.

      Hope this helps.

      Regards,

      Joyce

  9. Default Gravatar
    VirginiaJune 1, 2020

    Hello – Is a person on Carer’s Payment deemed “eligible” for Jobseeker, as per the listed conditions for early release of super? I am on a carer’s payment as I care full time time for my elderly parents and was hoping to find casual work this year but COVID-19 has made that impossible (I am not currently registered on Jobseeker). I have relied on my partner’s income to support us up until now as the carer’s payment in insufficient to pay bills but he will be unemployed in a few weeks. Can I apply for early release of super due to COVID-19? I am the one with superannuation.

    • Default Gravatar
      RestyJune 3, 2020

      Hi Virginia,

      Thanks for reaching out to Finder.

      As long as you are an Australian or a New Zealand citizen, you may be eligible as long as you meet at least one of the eligibility criteria for early release.

      – You’re unemployed
      – You’re eligible to get a job seeker benefit, youth allowance for jobseekers, parenting payment or farm household allowance
      – You’ve been made redundant or had your working hours reduced by 20% or more since 1 January 2020
      – You’re a sole trader and you’ve had to pause your business operations, or your turnover has fallen by 20% or more, since 1 January 2020

      To apply for the early release of Super, you may go to your MyGov account online and select the options to apply for early access to your super complete the application form, then ATO will assess your eligibility and will advise you of the release if deemed eligible.

      I hope this helps. Stay safe.

      Best regards,
      Resty

  10. Default Gravatar
    AlexMay 24, 2020

    I have not worked for the past five years due to being a stay at home parent while my partner has been employed full time. I have some Super available that I would like to access. Am I eligible even though I was unemployed before the COVID-19 pandemic?

    • Avatarfinder Customer Care
      MeiMay 24, 2020Staff

      Hello Alex,

      I see you want to know if you’d be able to have early access to your Super though it is not brought about by the pandemic.

      You normally can’t use your super until you reach your preservation age. Read about preservation age on the Australian Taxation Office (ATO) website.

      To get your super released early you must meet 1 of these eligibility requirements:

      (A) be in severe financial hardship
      (B) have a terminal illness
      (C) be a temporary resident
      (D) have less than $200 in your super fund
      (E) meet compassionate grounds

      Read the full details about early access to super on the ATO website.

      You can also use this Services Australia‘s page for additional reference.

      Hope this helps. Feel free to contact us back for further inquiries you may have.

      All the best,
      Mei

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