Superannuation & COVID-19

Superannuation & COVID-19

Temporary early release of superannuation

Updated: 17 April 2020

From 20 April 2020, people in financial distress as a result of the coronavirus pandemic will be able to self-certify and apply for early release of up to $10,000 of their superannuation in 2019-20, and again in 2020-21 (up until 24 September 2020).

Superannuation accessed under this measure is not taxed and will not impact on Centrelink or Veteran’s Affairs payments.

If you have a Self-Managed Superannuation Fund, you cannot withdraw any amounts from the fund until your SMSF receives a release authority from the Australian Taxation Office (ATO) enabling you to make the withdrawal. See How is the support provided? for details of the process to access your superannuation.

Eligibility

Coronavirus measures

Australian citizens, permanent residents and New Zealand citizens with Australian held super are eligible to apply for early release under the measures. Temporary residents are not eligible.

To be eligible to access up to $10,000 of your superannuation early under the coronavirus measures, you must meet one of the following requirements:

1. You are unemployed at the time of applying for the determination;

At the time of applying for the determination 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; or
• your working hours were reduced by 20% or more; or
• You are a sole trader and your business was suspended or there has been a reduction in your turnover of 20% or more.

General early release measures

Outside of the coronavirus measures, you are able to access your superannuation early on compassionate grounds if you need money to pay for:

• medical treatment and medical transport for you or one of your dependants (a child or partner etc)
• palliative care for you or your dependant
• making a payment on a home loan or council rates so you don’t lose your home
• accommodating a disability for you or your dependant
• expenses associated with the death, funeral or burial of your dependant.

If your application is rejected, you will be advised within 3 days via your MyGov account.

How is the support calculated?

Coronavirus measures

Under the coronavirus measures, you are able to apply for early release of up to $10,000 of your superannuation once between 25 March 2020 and 30 June 2020, and again between 1 July 2020 and 24 September 2020.

IMPORTANT: Withdrawals under this measure will be tax-free and will not affect Centrelink or Veterans’ Affairs payments.

If you have income protection, and/or life/total permanent disability insurance through your superannuation account, your superannuation may be affected if your balance falls below $6,000.

General early release measures

Any superannuation you withdraw is taxed as a superannuation lump sum payment.

How is the support provided?

For Industry & retail funds

• Apply to the ATO through your myGov account (you will need to link the ATO to your account if you have not already)
• The ATO will issue a release authority to you and your fund
• The fund will then release the amounts to you

For Self Managed Superannuation Funds

• Check your trust deed for any specific provisions relating to the early release of superannuation
• Apply to the ATO through your myGov account (you will need to link the ATO to your account if you have not already)
• The ATO will issue a release authority to you and your fund
• The trustees must self-assess the criteria (ensure you document this process and have the member’s documentation or a declaration from them)
• The SMSF will then release the amounts to the member

If you have multiple superannuation accounts, you can only release a total of $10,000 across all accounts. You could for example, release $8,000 from one fund and $2,000 from another.

Ensure you check your superannuation fund balance before making any applications. If you make an application and the fund has insufficient money to fulfil the application, you will not be able to make a second application for the balance from another fund/account in that financial year. You also will not be able to seek the balance in the 2020–21 financial year above the $10,000 cap.

For those eligible to access their superannuation, you can apply directly to the ATO through the myGov website from mid-April.

If you withdraw too much, you can recontribute the amount under the normal contribution rules.

Please contact our Melton Accountants on 03 9746 6479 for any questions you have about the stimulus measures.

We recommend that you please don’t act on the basis of this guide. The measures will apply differently and it’s important that you understand how your specific circumstances are impacted. Always seek personalised, professional accounting advice.