Early Super Access! How to exercise your rights during COVID-19

Needing early super access? You’re not alone.

In the wake of the recent COVID-19 pandemic, the Government has allowed early access to superannuation funds for a certain group of people and traders. Although the early access prescription appears easy to follow, there can be cases that fall on the eligibility borderline. The scales weigh more on the side of eligibility rather than the ineligibility side of early access for the applicant. The simple consequence of this misinterpretation could risk an eligible applicant becoming an ineligible one.

What did the Government say?

The Government would allow early access to the super funds by those affected by the COVID-19 crisis. Basically, an eligible super funds member can withdraw $10,000.00 this financial year which ends on 30 June 2020, and another $10,000.00 next financial year which starts as of 1 July 2020. This is tax-free the Government said.  The measure is designed to address the existing hardship on the eligible individuals and traders to whom this new ruling would apply.

I am currently employed but my wife has been made redundant. Can we both apply for early access to our super funds?

If you are still working and it is only your wife who has been made redundant after 1 January 2020, then your wife can only exercise her right of early access to her super funds. To become eligible, she needs to show that either:

• As an individual, she was made redundant by her employer, or her working hours reduced by 20% or more; or
• As a sole trader, her business has suffered a 20% or more reduction in her turnover.

I am unemployed but receive a job seeker payment. Can I still apply for early access to my super funds? 

Yes, you can.

I receive a youth allowance for job seekers. I have not many funds left in my super. Can I still apply for the early access, or do I need to have a minimum available in my super funds?

Yes, you can. So far the Government has not set a benchmark for the available funds in a super account. The Government has however defined the maximum that can be withdrawn from the super funds in this and next financial year.

I currently receive parenting and some other special payments from Centrelink, can I still apply for early access to my super funds?

Providing you meet the individual, or, the sole trader tests above, yes you can.

Having read your article here, I now know that I am eligible to have early access to my super funds, how do I do it?

Applications are to the ATO via the My Gov website. The process is pretty simple. The ATO will verify the applicant, assess the application, record the bank account details, and make a decision. The ATO will then direct the nominated fund to release the requested amount to the bank account specified by the member. It is essential to know is that the member does not need to contact his/her super funds at all in the process.

Just so I could educate myself, what is the total amount that this scheme will allow to be accessed from the super funds, and how much more will be left in the super after?

According to the Government, it is estimated that around $27 billion funds might be taken out via early release, however, this is less than 1% of a circa $3 trillion superannuation in the system owned by the Australian members.

Article Source: Early Super Access