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Accessing super early: Unemployed and in financial hardship

February 11, 2011
By 15 Comments

Q: I have been unemployed for 10 months now and I am still having problems finding work. I’ve got bills to pay off and I’m finding it hard to do that with the tiny amount I get from Centrelink each fortnight. Is there any way I can claim I have financial difficulties and use my superannuation towards my bills?

Trish’s response: I’m sorry to read about your troubles. Yes, in certain circumstances individuals suffering financial hardship may be able to access a portion of their super benefits.

Note that even if you satisfy the conditions for early access to super benefits due to ‘severe financial hardship’ you may belong to a super fund that doesn’t permit access on these grounds. As a preliminary step, check with your super fund as to whether they permit benefit withdrawals for financial hardship.

Quoting directly from the APRA website, the rules for the ‘severe financial hardship’ condition of release are as follows:

If you have been receiving an eligible income support payment from Centrelink, you may be able to apply direct to your superannuation fund/RSA for the early release of your superannuation funds.

To be granted an early release under this ground you must:

  • be in receipt of a Commonwealth income support payment, and have been so, continuously, for the last 26 weeks; and
  • satisfy the trustee/RSA provider that you are unable to meet reasonable and immediate family living expenses.

If you satisfy both of the above, the trustee/RSA provider may, in any twelve month period, release to you one lump sum payment. The lump sum payment will be no more than a gross amount of $10,000 and no less than $1,000 (or the balance of your benefit if it is less than $1,000).

If you are aged 55 years and 39 weeks or more, an alternative, optional, objective test of severe financial hardship may be applied to you. That is, you must:

  • have received a Commonwealth income support payment for a cumulative period of 39 weeks after reaching age 55; and
  • not be gainfully employed on a full-time or part-time basis on the date of your application to the trustee/RSA provider.

If you satisfy this test, the trustee/RSA provider may release your entire benefit.

In all cases, as part of the objective test, applicants will need to provide the trustee/RSA provider with a letter from Centrelink, the Department of Veterans’  Affairs or a Commonwealth Community Development Employment Project (CDEP) grantee organisation confirming that you meet one of these tests.

You are not required to contact APRA to make application for release under this ground.

(extract from the APRA website)

Warning: You may not be aware that if you are permitted to access your super benefits, then 20% tax (and possibly up to 25% tax depending on the type of super fund that you belong to) will be deducted from the super benefit before it reaches your hands.

Accessing super early: Unemployed and in financial hardship Super Guide

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Accessing super, Accessing super early

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Comments

  1. cassie says:
    March 19, 2013 at 10:25 pm

    Hi husband was made redunate at end of last year a week before christmas, he worked for company for 20 years, he received small payout but once debts where paid not much left. we where all set to start work again and hubby had a fall and requires surgery on foot and can be laid up for 6 months, i need hip replacement and get a small centrelink payment, can we access some of his super????

    Reply
  2. nella says:
    June 19, 2012 at 10:58 pm

    Hi, I’m on parenting payment single for more than 5 months now, and i have financial hardship. I believe I have about 4 providers, but don’t know how to claim it. please help.

    thanks
    nella

    Reply
  3. Stella says:
    November 10, 2011 at 10:48 am

    Hi just wondering i work permanent part time and recieve single parents pension i am in debt between the tax office and centrelink
    Am i able to
    Access my super to pay some of my debts im in severe hardship :(

    Reply
  4. Samuel says:
    November 6, 2011 at 8:28 pm

    Hi Trish
    I am working at the moment, our vehicle which we bought with cash upfront has just died on us and is irrepairrable. We have tried to apply for Finance, however we are not eligible. I need the use of a car because of my line of work. I can put some money aside little by little, it wIll take us many months before we can purchase a car.

    I dont know where to go to as we do not have savings at the moment. Would my superfund possibly allow for withdrawal?

    Reply
  5. Alex says:
    October 19, 2011 at 12:30 pm

    Hi Trish

    I will be turning 60 in about a month and would like to get a 90% super payout. Currently I am working full time however, if I leave the current employer how long would I need to stay unemployed to be classified as retired to access my funds???

    Regards

    Alex

    Reply
  6. Greg says:
    July 10, 2011 at 10:51 am

    I withdrew on my super last yr and paid tax on it… will i get that tax back with this yrs return???

    Reply
  7. giulio says:
    May 2, 2011 at 2:57 pm

    hi trish, im on a disabilty pension and in financial hardship with 3 dependants. i have $9000 in my super and was wondering if i am able to access the whole amount???

    Reply
  8. adam dawson says:
    April 28, 2011 at 2:54 pm

    i have overdue loans and rent i need help claiming some of my superannuation .i’m 35 year’s of age please help

    Reply

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