Spoiler Alert: It's completely possible. The primary purpose of a super is to help finance your retirement, but in some circumstances, you may be able to claim or access these funds early. In most cases, these withdrawals require exceptional circumstances such as poor health or severe financial hardship, so it is possible. But not easy.
In this article, we will share how you can get your super early access, possible roadblocks, and other important details about your superannuation and claim applications. Read on.
What Are The Normal Conditions To Access My Super?
It surprises many people to learn that the age at which you can access your superannuation is not Age 65. Getting access to your superannuation simply requires you to meet a 'Condition of Release'. According to the ATO, the most common conditions of release are that a member:
- has reached their preservation age and retires
- has reached its preservation age and begins a transition-to-retirement income stream
- ceases an employment arrangement on or after the age of 60
- is 65 years old (even if they haven't retired)
- has died
Currently, the 'Preservation Age' is age 59, but if you're born after 1 July 1964, then you will have to wait until Age 60. Importantly, this means that there are a few ways to access your super from Age 60:
- Retire
- Via a transition-to-retirement income stream (withdrawals are capped at 10% of the account balance each year)
- Cease an employment arrangement.
The last point is often overlooked - accessing your super from Age 60 simply requires that "an employment relationship ends." This can be as simple as changing roles after Age 60 or working a part-time/casual role and leaving that role after Age 60. In any case, you could continue to work your main role without change and still meet a Condition of Release.
Can I Get An Early Access To Super?
Yes, given that you have a valid reason as to why you wish to claim your super early and have completed all the requirements, you may be approved to access your super early.
When Can You Access Your Super Early
Gaining early-release access to your super is completely possible.
Here's a list of instances and special circumstances that meet the eligibility criteria that will grant individual applicants access to their super:
Access on compassionate grounds
An applicant is granted access to their super on compassionate grounds if they're in dire need of help in financing the following:
- personal medical treatment/severe disability palliative care or for a dependent
- personal medical transport or for a dependent
- modifications of their home and vehicle to accommodate the special needs caused by a severe disability
- death expenses, funeral expenses, or burial expenses of a dependent
- preventing foreclosure or forced sale of home to home buyers
To be approved for access on compassionate grounds, the applicant must fulfill all the requirements and provide the supporting documents for the application. If the applicant fails to submit the completed documents, the application process will be pushed back or denied.
Take note: The super you withdraw on compassionate grounds is paid and generally taxed as a normal super lump sum by the Australian Taxation Office (ATO). If you're under 60, tax will likely be payable on this withdrawal.
Access due to a terminal medical condition
You will be granted access to your super early if specific terminal medical conditions are met, including the following:
- Certification(s) coming from two doctors, working together or separately that indicates the confirmation of their terminal illness and the possibility of dying within 24 months from issuance or once signed
- One of the doctors MUST be a specialist in the field related to your terminal illness
- Ongoing 24-month certification certain period
Access due to severe financial hardship
If you're experiencing severe financial hardship, you can take some money from your superannuation. However, refer to your super fund provider first for this kind of withdrawal, as the tax office usually doesn't handle it.
Whether you can get the funding from this method or not will depend on how old you are according to your birth preservation age:
- If you're younger than 'your preservation age plus 39 weeks', you need to have received certain government support payments for 26 weeks in a row and be able to demonstrate that you still can't cover your family living expenses. You can take out between $1,000 and $10,000 or the full balance if you have less than $1,000 left in your super after tax. You can only make a Severe Hardship Withdrawal once each year.
- On the other hand, if you are older than 'your preservation age plus 39 weeks' and you've received certain government support payments for 39 weeks after reaching that age, you can take out as much as you need. But you must not have been gainfully employed when you applied for the super early access.
To request this kind of withdrawal, you can talk directly to your superannuation provider. They will require proof, so please ask Services Australia for a letter confirming your government support payments.
Learn more about the preservation age here.
Access due to temporary incapacity
If you're temporarily incapable of working or are forced to work less due to a medical issue (either physical or mental), you are eligible to withdraw some of your superannuation. Withdrawal of super this way is usually used for insurance benefits tied to your personal superannuation account.
This way you'll get your super in regular payments like income support over a cumulative period of time.
The tax for this kind of super withdrawal is the same as regular super and eligible income support payments. To be granted this access, coordinate with your super provider and inquire about any insurance connected to your super account.
Access due to permanent incapacity
Commonly known as a 'disability super benefit', access to this payment is granted to applicants who can no longer work due to a permanent and severe medical condition (either physical or mental). Typically it will be your super fund that checks if your condition no longer serves your profession and if it's something that hinders your efficiency with your usual work.
Even under the super access, you may still be allowed to take in easier jobs or part-time work in another field if you qualify. This access will allow you to withdraw your super as a lump sum or regular payments.
To pay less tax or tax-free, you'll need two doctors, one of whom MUST be a specialist, to confirm your permanent incapacity to work.
You can refer to your super fund provider directly if you think you qualify. They can also help you understand how your super payment will be taxed, depending on what's in your super account.
Super balance less than $200
You can get your super if:
- You lose your job, and your super has less than $200 in it
- You can claim a 'lost super' account that you can find with less than a $200 deposit
Just ask your super fund provider so you can begin accessing super early. For super funds held by the tax office, ensure you meet reasonable criteria to claim.
Take note: No tax is taken when you withdraw a super with less than a $200 deposit.
What is a lost super?
If a superannuation holder ever changes their name, address, or job, it's possible that they may have lost track of some of their super funds. A superannuation fund will consider you a 'lost member' and hold your money for a certain period of time until they find you.
Your super will become 'lost', when either:
- Your account has been inactive (no contributions) for a period of five years
- Your super fund loses contact with you, e.g. their statements posted to you are returned due to an incorrect address AND there's been no rollovers or contributions over the last 12 months.
From here your money will be transferred to an ATO holding accounts which have no fees. Incredibly, there is currently over $16 BILLION in lost super in lost super in Australia!
Illegal early release of super and scams
Watch out for scams and illegal schemes related to your superannuation.
Some promoters claim they can help you access an early release of super by moving it into a self-managed super fund. These illegal schemes are against the law, and if involvements are proven, culprits could face serious penalties.
What Do I Do If Someone Else Accessed My Super Early?
If you're worried that someone may have taken your superannuation before you without your authorisation, these steps can help protect your superannuation and personal information if you believe it has been compromised.
Step 1. Check Your Accounts. Review your superannuation account to ensure all the details are right, including your passwords. Make sure that there are no tampering or unauthorised transactions present; otherwise, report it to your super fund provider right away.
Step 2. Be Cautious. If you receive an SMS or email saying that the details of your super have been altered or that you've applied for early super release when you haven't, don't click any links, as it can give them a means to access your super.
You can contact us directly here at Northeast Wealth to verify if an interaction is legitimate. We advise that you stay vigilant to protect your money and information from potential scams.
Final thoughts
Claiming a super before retirement is highly discouraged, but sometimes life can get in the way and leave us out of options under severe financial hardship. Although possible, early access to super funds is issued exclusively on very specific instances to eligible applicants — but not all.
Please take note that all the info mentioned here is also applicable to any temporary resident who already left Australia looking to claim their departing Australia superannuation payment.
If you wish to learn more about how you can get early access to super or need help acquiring yours, you can book an appointment directly with us so we can match you with one of our financial advisors right away. Click here to book your appointment.
James O’Reilly is the Director of Northeast, a fast-growing financial advice firm that empowers clients to achieve meaningful financial progress and well-being. He's also the co-host of the Australian Retirement Podcast, one of Australia's fastest-growing podcasts.