Early access to your super

As a general rule, you usually can’t access your super until you reach your preservation age (between 55 and 60 years, depending on your date of birth) and meet a condition of release.

The most common conditions of release that allow you to access super benefits are:

• Reaching your preservation age and retiring
• Reaching your preservation age and starting a transition to retirement pension while continuing to work
• Reaching 65 years of age (even if you have not retired)
• Being aged 60 to 64 years and ceasing an employment arrangement
• Passing away (in this case, your super death benefits will go to your nominated beneficiaries)

However, if you've fallen on particularly hard times financially, you might be able to access your super early without meeting one of the above conditions.

• In 2020 the Australian Government allowed Australians to access some of their super if they had been financially impacted by Covid-19. However, this COVID-19 early access to super scheme has now ended.

When can I access my super early?

In certain limited circumstances it is possible to access your super savings early, including the following reasons:

• Compassionate grounds
• Due to severe financial hardship
• Due to a terminal medical condition
• Due to temporary incapacity
• Due to permanent incapacity
• If your super balance is less than $200
• If you’re a temporary resident leaving Australia for good

Let’s examine each of the above conditions of release to find out when and how you can withdraw your super benefits early.

Compassionate grounds

You may be granted early access to your super on compassionate grounds if the Department of Human Services (DHS) is satisfied that your application meets the eligibility criteria. The amount you withdraw is paid and taxed in the same way as a normal super lump sum.

It’s also worth pointing out that the early release of super on compassionate grounds will only be granted to help you cover unpaid costs. If you’ve already paid those costs, even by using a loan or credit card, you won’t be able to access your super.

Compassionate grounds include:

Medical

If you need to pay for medical treatment for yourself or a dependant, or to travel to receive treatment. You or your dependant must have a life-threatening illness or injury, acute or chronic pain, or acute or chronic mental illness. You must also show that you can’t get treatment through the public health system (this is not required for travel to medical treatment) and that you can’t cover your costs any other way.

If you meet the necessary requirements, your super fund will release enough money to cover your reasonable medical costs. This amount will be determined based on quotes and invoices.

If you don’t have enough money in your super to cover those costs, you’ll need to show the DHS how you’ll pay for the rest.

Mortgage

If a lender threatens to sell your home because you have fallen behind on repayments, you may be able to get an early release of super to ensure that you don’t lose your home. You will only be eligible if:

• It’s your main home
• You’re legally responsible for the mortgage
• You can’t make loan repayments any other way, for example, by selling other assets

The DHS will only let your super fund release enough money to stop the lender selling your home. The maximum amount you can receive from one super fund per year is:

• Three months of repayments, and
• 12 months of interest on the balance of the loan

If your super balance is insufficient to cover costs, you must either:

• Reduce the arrears, or
• Provide a letter from your lender confirming their willingness to accept the money available in your super to stop the sale of your home

Disability

If you or one of your dependants have a severe disability, you can apply to the DHS for early release of your super to modify your home or vehicle to suit your special needs, or to buy disability aids.

The modifications must be to your main home or a car you own, and you’ll need to be able to demonstrate that there’s no other way you can pay for those modifications. If your application is successful, the DHS will let your super fund release enough money to cover reasonable costs.

If you don’t have enough money in your super to cover those costs, you’ll need to show the DHS how you’ll pay for the rest.

Palliative care

If you need an early release of super to pay for your own palliative care, you can apply directly to your super fund. The fund can release the money when you have a terminal illness and you won’t pay any tax on this amount. The DHS can also approve the early release, but you’ll need to pay tax on the money you access.

You can also access an early release of super to pay for palliative care for a dependant who:

• Has a terminal illness
• Needs help paying for palliative care
• Can’t pay any other way

If your application is successful, you can access enough of your super balance to cover reasonable costs.

Funeral

Early release of super may also be possible if you need to cover the cost of a dependent's funeral and you can’t pay in any other way. You’ll need to apply to the DHS to let your super fund release money to cover reasonable costs, which include things like the funeral service and headstone but do not extend to the wake.

Severe financial hardship

If you’ve received eligible government income support payments for a continuous period of 26 weeks and you can’t cover your immediate family living expenses, you can apply directly to your super fund for an early release of super.

Paid and taxed as a normal super lump sum, this early release allows you to access between $1,000 and $10,000. A maximum of one withdrawal is allowed in any 12-month period.

However, before applying for early access to super due to severe financial hardship, keep in mind that an early release may reduce your Centrelink payments such as the Family Tax Benefit, Child Care Benefit and income support.

Terminal medical condition

If you’ve been diagnosed as terminally ill, you can contact your super fund to request early access to your super. To qualify, you’ll need two medical practitioners to certify that you have less than 24 months to live, and one of those practitioners must specialise in an area related to your illness or injury.

Your super is paid as a lump sum and if withdrawn within 24 months of certification by the medical practitioners is not taxable.

Temporary incapacity

If you suffer from a physical or mental medical condition that leaves you temporarily unable to work, or only able to work reduced hours, you can apply to your super fund to receive your super in regular payments (an income stream) during that time.

In these circumstances, the payments you receive are taxed as a normal income stream.

Permanent incapacity

In situations where you are permanently incapacitated, you can apply to your super fund for early release of super. Often referred to as a “disability super benefit”, this amount can be paid as a lump sum or an income stream.

To qualify for early access, you’ll need to prove to your fund that you have a permanent physical or mental medical condition that will most likely prevent you from ever working again in a job for which you are suitably qualified. This must be certified by at least two medical practitioners in order for you to receive concessional tax treatment.

If you qualify for this payment, keep in mind that you almost certainly also qualify for a Total and Permanent Disability (TPD) insurance payment. If you hold TPD cover through your super fund, this may offer the financial support you need.

If your super balance is less than $200

If you change jobs and the balance of your super account is less than $200, you may be able to access your super. You’ll need to get in touch with your super fund to request access, and the good news is that no tax is payable if you access a super account with a balance of under $200.

If you’re a temporary resident leaving Australia for good

While you’re a temporary resident working in Australia, your employer is required by law to make super guarantee contributions for you. Once you return to your home country, you’ll be able to access your Australian super savings. This is called a Departing Australia Superannuation Payment (DASP).

You may claim your DASP if:

• You accumulated superannuation while working in Australia on a temporary resident visa (except subclass 405 and 410).
• Your visa is no longer valid, for example, it has expired or been cancelled.
• You have already left Australia.
• You are not an Australian or New Zealand citizen, or permanent resident of Australia.

You can claim your DASP online here.

How to apply for early access to super

If you're applying for early access due to financial hardship, you can apply to your super fund directly. You may be required to show evidence that you're experiencing severe financial hardship, for example with proof of income support payments. Contact Services Australia (or your local Centrelink office) and request a letter confirming this, which you can show to your super fund.

If you're applying for early access on compassionate grounds, you can do this via your myGov account online. Once you're in your myGov portal, navigate to the ATO services and click on the 'Super' option. You should see a form where you can apply for access on compassionate grounds.

When you can't access your super early

You can't access your super early to help you fund day-to-day expenses, even if they're particularly large expenses. The reason for this is because superannuation needs to be for the sole purpose of benefitting you in retirement (not benefitting you right now).

You can't access your super early for things such as:

• To pay for house renovations
• To pay for a new car
• To pay off a loan
• To start a business
• To buy investments outside of super
• To pay for school fees