Five things to consider before accessing superannuation early

If COVID-19 has affected your financial situation, you may be able to access funds in your superannuation account to help you through a difficult time.

The COVID-19 early release of super program ended on 31 December 2020.

Early access to superannuation is one of the measures the Federal Government has introduced to help people who have been financially affected by the COVID-19 pandemic.

The rules mean people who are eligible will be able to apply to access $10,000 from their super fund between now and 30 June 2020 and a further $10,000 between 1 July and 24 September 2020. If you do access these funds, you won’t need to pay tax on this money or declare it in your tax return.

With many people feeling uncertain right now, it can be tempting to draw on your super as a safety net. But withdrawing money from your super account before you retire can mean you have much less to live on when you leave work for the last time. So before taking any action, make some time to understand how this could impact your financial future.

1. Am I allowed to access my super early?

The first step is to understand whether you are eligible to access your super early. To be eligible, you need to have been impacted by the COVID-19 environment and be an Australian citizen or permanent resident who is:

  • Unemployed and eligible for a JobSeeker payment.
  • On youth allowance for JobSeekers.
  • Receiving a parenting payment, including single and partnered payments.
  • Collecting the farm household allowance or another special benefit.

There are other criteria that determine whether you qualify. You may be able to access your super early if you were made redundant on or after 1 January 2020, or your working hours have dropped by 20 per cent or more since then. You can also apply to access your super early if you’re a sole trader and your business turnover has dropped by 20 per cent or more, or if your operations have been suspended.

Some temporary residents can also access $10,000 from their super. You may be in this category if you’ve held a student visa for more than 12 months and you can’t pay for your living expenses. Skilled workers on a temporary visa who are still employed but can’t pay for their daily living requirements may also be in this group.

2. Do you understand the consequences for your long-term retirement savings?

Taking money out of your super fund now may mean you retire with a much smaller super balance down the track. That’s because the power of compound returns means the more you have in your super fund and the longer you leave it there, the more you will have later in life.

Also be aware that scammers have been pretending to be from the ATO and super funds, offering fund members access to their retirement savings. These criminals are stealing personal information and super money. Contact the ATO if you are concerned you have been targeted by a scammer.

3. Have you considered other support available?

It’s important to consider all your options before deciding to draw on your super, including the full range of measures the Federal Government and banks have announced to assist people who are suffering financial hardship as a result of the pandemic. These include:

  • JobKeeper: a payment of $1500 a fortnight before tax, which is a wage subsidy for eligible employees that can be accessed by eligible employers that generally have been affected by the pandemic1.
  • Coronavirus supplement: an extra $550 a fortnight for people who are already receiving certain types of income support2.
  • Deferral of mortgage and other loan payments for a period of six months3.

Make sure you have explored all these initiatives before you decide to access your super.

4. Do you really need the money?

It’s natural to feel concerned about cash flow now, but it’s even more important to think through whether you really need the money before you decide to take cash out of your super fund.

There may be other sources you could use before accessing your super money, including dipping into your savings or other investments.

It’s important to consider these avenues as many people’s super balances have dropped due to recent share market falls. Keeping more money in your super means that you have more available to invest for your financial future for the long term.

5. What will it mean for your insurance cover?

Many people hold income protection and life and total permanent disability insurance inside their super funds.

Your insurance may be cancelled if you withdraw funds from your super that results in the balance dropping below the amount required to pay your insurance fee or premium.

For members whose super product offers automatic insurance that has not yet commenced, please also note that unless you ‘opt in’, your insurance will only commence when you are over 25 and your balance reaches $6,000. Any withdrawal may mean it will take longer for your insurance to commence.

You can check your insurance details online by logging in to your super account at or by calling us on 132 135 between 8.30am and 5.30pm Sydney time.

For more information, visit our COVID-19 hub.



3 By contacting your bank and making an application for assistance as a result of the pandemic

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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 May 2020.

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 referenced from third parties and derived from sources believed to be accurate at its issue date. 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.
For more detail, speak with a financial adviser or visit the ATO website.