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Can you withdraw your super if you’re out of work due to COVID-19?
By Julia Newbould Published on March 18, 2020
Since this story was published, the government has introduced new hardship measures to allow Australians early access to super.
The coronavirus is the latest blow to those already struggling financially, but what does it take to access your super early?
In the case of severe financial hardship, where you cannot meet your living expenses, you may be granted an early release of super but there are very specific rules around accessing it before you reach the preservation age.
As well as proving financial hardship, which includes the ability to pay for reasonable and immediate living expenses, you need to have been on Centrelink benefits for 26 weeks.
If you then qualify for early access the minimum amount that can be paid is $1000 (unless your super balance is less than $1000) and the maximum amount is $10,000.
In addition, you can only make one withdrawal from your super fund because of severe financial hardship in any 12-month period.
Super may also be released on compassionate grounds - to pay for unpaid expenses, which could include a loan repayment to prevent you losing your home, medical treatments for you and a dependant, modifying your home or vehicle because of a severe disability, or funeral expenses.
For those who meet the criteria or need to access super for any of these reasons, MoneySmart recommends contacting a financial counsellor to help you understand your options, how to apply for your super, and managing other expenses you might be struggling to manage such as housing and bills.
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Super funds receiving more enquiries
More Aussies have been asking about accessing their super early since the coronavirus outbreak, says AustralianSuper spokesman Stephen McMahon.
While members still need to meet the requirements, AustralianSuper is prioritising financial hardship claims.
"This is similar to the approach we took after the recent bushfires and similar natural disasters that have happened in various parts of Australia," McMahon says.
A Media Super spokesperson told Money they are receiving a small number of enquiries from members regarding accessing super due to the financial impact of the coronavirus.
"This is unfortunately not unexpected and enquiries are likely to increase with time as our membership is likely to be disproportionately impacted - many of our members are freelancers/self-employed and many work in the entertainment and arts sectors, where we're already seeing loss of income due to event and performance cancellations and venue closures."
"We always do our best to support members where we can, but it's likely many people will not be eligible for early access to their super.
The Federal Government's stimulus package does not cover a lot of sole traders, which includes freelancers and the self-employed.
"We encourage people to find out what support may be available through Centrelink or even their industry's union; if people have loans and mortgages they're concerned about, they should speak to their financial institution to see what arrangements can be made during these exceptional circumstances."
Financial adviser Anne Graham says accessing super early is fraught.
"Even if there were no conditions attached you have to weigh it up: if you take it out now, you're taking it out at a low point in the market and crystallising any loss," she says.
"But if you're young and you need it and it's a low balance, you will have time to make it up."
Other reasons for early release
You can also apply for early release of super in the event of a terminal medical condition.
If your fund does not allow access due to terminal illness, you may be able to move your super to a different fund.
You may be also able to access your super if you are permanently incapacitated. This type of super withdrawal is sometimes called a disability super benefit.
Your fund must be satisfied that you have a permanent physical or mental medical condition that is likely to stop you from ever working again in a job you were qualified to do by education, training or experience.
At least two medical practitioners must certify this for you to receive concessional tax treatment.
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19 responses to “Can you withdraw your super if you’re out of work due to COVID-19?”
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PLEASE UPDATE YOUR ARTICLE @Moneymag
The Government is allowing individuals affected by the Coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21. TEMPORARY EARLY ACCESS TO SUPERANNUATION
While superannuation helps people save for retirement, the Government recognises that for those significantly financially affected by the Coronavirus, accessing some of their superannuation today may outweigh the benefits of maintaining those savings until retirement. Eligible individuals will be able to apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 for approximately three months (exact timing will depend on the passage of the relevant legislation). Eligibility To apply for early release you must satisfy anyone or more of the following requirements:?you are unemployed; or?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; or?on or after 1 January 2020:you were made redundant; oryour working hours were reduced by 20 per cent or more; orif you are a sole trader ? your business was suspended or there was a reduction in yourturnover of 20 per cent or more.People accessing their superannuation will NOT need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans' Affairs payments.
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Early_Access_to_Super_1.pdf
Hi B,
You can see our latest story on the new hardship provisions for super here: https://www.moneymag.com.au/access-super-early-coronavirus.
– Money team
I've been unwell woth reoccurring chest infections and my immune system is down. My doctor has given me 3 weeks off work and is looking to give me more time off work as I work within the aged care sector. I have run out of sick and annual leave. Will I be able to access my super? I'm with Qsuper
Hi there,
Can you get early release of super for COVID-19, and then also later for medical reasons? Two withdrawals in same year, different reasons??
19 year old son lost his job due to Covid-19. He lives at home. He is not entitled to Newstart or job seeker payment as it means tested on his parents income. He does not have any super. Can you claim early access to super due to dependant losing their income and you having to support them, paying for their expenses etc.
He should be able to get 'Jobkeeper payment' if put off due to Covid-19 (see link attached)
https://treasury.gov.au/sites/default/files/2020-04/Fact_sheet_Info_for_Employees_2.pdf
Should I take out the 2 withdraws I am 60 out of work mortgage no unemployment benefits was on salary and don't have a bit in my fund
My wife lot her job due to cov19 we now only have my wage we a struggling to pay all our bill only on my wage . We can't manage is it possible for me to access my supper.as my wife dose not have much as I do
I'm in the same position as Rob would be great to get an answer on this as we have 2 young children, but she does not qualify for any payments due to a recent career change and not long enough in her job.
I'm in the same position and I can't seem to find an answer. Can we access my wife's super? I've lost my job and she only works part time…??
same here.hope someone can give answer in this situation.
If someone had their super released approximately 3 months ago for financial hardship, can they withdraw another amount due the the covid-19 early release also?
I have same question I rang ato no one can anserw I released my super for hardship 3 months ago am I eligible as it is for a different reason and it's due to covid 19
I have lost all my overtime due to covid-19 well over $1000 a week , can I access my super ?
Was wondering the same thing.. I havent had any overtime this year and depend on it to get ahead.. I have earned nearly 20k less this financial year compared to last…
Some friends got their 10k but their hrs didn't change nor their wage. Will they incur penalty or do they have to return the money in case?
hi
I am a Registered Nurse, i lost my hours exactly by 20% due to unknown reason, but it has nothing to do with covid 19
Can i withdraw my super ?
Started back work on June 1 am I entitied to apply on June 1 after losing more then 20% for an extended period of time
I have had my first 10,000 just wounding if I can apply for another 10,000 in July as I still have enough money in my super.