This weeks question is another common query; can you withdraw the money in your superannuation early?
This seems to be one of the first ‘solutions’ to pop into the mind of a lot of people when really it should be considered only as a last resort.
By law, you generally get your super only when you:
- permanently retire from the workforce, and also
- reach the minimum age set by law, called your ‘preservation age’ (this is typically between 55 and 60 depending when you were born).
- permanently retire from the workforce, and also
- reach the minimum age set by law, called your ‘preservation age’ (this is typically between 55 and 60 depending when you were born).
You can get your super earlier only if you:
- suffer permanent incapacity for work, or
- possibly in cases of severe financial hardship, or
- on ‘compassionate grounds’.
- suffer permanent incapacity for work, or
- possibly in cases of severe financial hardship, or
- on ‘compassionate grounds’.
Contact your fund. If the rules allow early release of benefits, you must satisfy the trustee that you have been receiving a Commonwealth income support payment for a continuous period of 26 weeks and you cannot meet your reasonable and immediate family living expenses.
Contact your fund. If the rules allow early release of benefits, the ‘compassionate grounds’ are set out in the law. The Australian Prudential Regulation Authority (APRA) must consider your application first, before your fund trustee can make a final decision.
Compassionate grounds involve medical treatment for serious conditions that is not readily available through the public health system, transport for medical treatment, changes to a home or vehicle because of a severe disability, palliative care, funeral and burial expenses, or to prevent the forced sale of your home by your mortgagee.
Avoid illegal schemes that try to get your super money out early, and save yourself from getting cheated and from heavy tax and legal penalties. These schemes are sometimes promoted by word of mouth or shady advertising.
Report to ASIC or the Australian Tax Office (ATO) anyone who tries to talk you into getting your preserved benefits early through a self-managed super fund or for a fee. AVOID THESE SCAMS and do not risk your money.
Source: Information for this response has been sourced from the Australian Securities and Investments Commission.
Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
Christie has written 799 awesome articles for us at Alan Lewis Accountants – BLOG
Twitter: @christielewis
{ 2 comments… read them below or add one }
Hi Christie
I left Australia in Oct of 2010 after having been there living and working for 7 years and I am currently have full residency status. My father was diagnosed with terminal cancer and I had to return to Canada. In the advent of the GFC he does not have enough to cover all the ensuing expenses and therefore my brother and I are sharing the responsibilities of care and have recently became his Power of Attorney. An assessment of his financial situation and existing and ongoing costs of care are stacking up.
My question:
1) Do I qualify for early withdrawal of my supperannuation? And if so how do I prove that he’s my dependant?
2) In trying to accumulate documentation for my case, is there any specific documentation that the APRA will be looking for? The necessary information is a bit vague.
I really appreciate any advice you can give me.
Thanking you in advance
Skippy
“brother and I are sharing the responsibilities of care and have recently became his Power of Attorney”
To show that he is a dependant on you, would be power of attorney, If he lives with you, If you transfer money to him for day to day living or care giving. But apra will want to know what you want the money for i.e medical treatment, medical transport, if you need to modify home or vehicle for a severe disability/injury, for funeral or palliative care cost and final one is mortgage. Other than that they won’t but any one can apply