There are strict requirements that you must meet to qualify under these conditions.
We take a look at them in more detail, including what you need to provide to show you’re eligible.
If you have been diagnosed with a terminal illness or injury which results in a life expectancy of no more than two years, you may be eligible to access your super early in the form of a lump sum, tax free.
There are specific requirements you’ll have to meet though, including providing the required documentation from at least two registered medical practitioners.
If you suffer from a medical condition or injury which prevents you from working for a period of time or permanently, you may be able to access your super under either the temporary or permanent incapacity conditions of release.
If you’re temporarily unable to work due to sickness or injury, you may be able to access your super as a regular income stream. Usually this will be funded by specific insurance (such as income protection insurance) held within your super account. This means you’ll be able to supplement or replace your salary while you’re not working.
If you’re diagnosed with a condition that makes it unlikely you’ll be able to return to work in a job that you’re qualified to do, you may be able to access your super under permanent incapacity condition of release.
Under this condition of release, there is the option to access your super as either a lump sum or a regular income stream but you will be required to provide relevant medical documentation to prove you’re eligible.
If you or a dependant have a serious illness or are severely disabled, you may be able to access your super early under compassionate grounds to cover things such as medical treatment or to modify your home or vehicle to accommodate the disability.
The compassionate grounds condition of release also allows you to access your super to pay for certain expenses if you do not have the financial capacity to do so. For example, you may be able to access your super to make a loan repayment to prevent foreclosure of a mortgage.
This really depends on your situation but it’s important to be aware that you may be taxed on the sum of money you receive from your super. This is generally between 17–22 per cent1 if you’re under the age of 60. However, if you are over 60 years old you won’t have to pay tax on the amount withdrawn.
If you are still unable to cover your immediate living expenses despite having received government income support continuously for at least 26 weeks, you may be able to access your super early under severe financial hardship condition of release.
The maximum you can access under this condition of release is $10,0001 before-tax in any 12 month period. You may also need to pay tax on the sum of money you receive from your super.
If you are considering accessing your super early, you may want to speak to your super fund as they may have specific rules which prohibit you from accessing some of these conditions.
You may also want to consider seeking financial advice to understand how this may impact your financial situation over the long-term and in retirement.
This guide has been created to help provide emotional, physical, social and financial support for people who are suffering serious illness or injury, and their carers.
This article was prepared by BT, a part of Westpac Banking Corporation ABN 33 007 457 141, AFSL and Australian Credit Licence 233714. This information is current as at 14 June 2019.
1. This article provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. It does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness, having regard to these factors before acting on it. This information may contain material provided by third parties derived from sources believed to be accurate at its issue date. While such material is published with necessary permission, no company in the Westpac Group accepts any responsibility for the accuracy or completeness of, or endorses any such material. Except where contrary to law, we intend by this notice to exclude liability for this material. BT cannot give tax advice. Any tax considerations outlined in this article are general statements, based on an interpretation of the current tax law, and do not constitute tax advice. As such, you should not place reliance on any such taxation considerations as a basis for making your decision with respect to the product.
Superannuation is a means of saving for retirement, which is, in part, compulsory. The government has placed restrictions on when you can access your investment held in superannuation. There will be tax consequences if you breach these caps. For more detail, speak with a financial adviser or visit the ATO website.