FAQ: I am 45 and have just lost my job. Can I access my super to see me through until I find another job?

It is common for people to start looking at their superannuation balances when under financial stress, however, although it is your personal superannuation account, it is generally difficult to withdraw any benefits until retirement.

For most of us, our superannuation benefits are ‘preserved’ which basically stops people from accessing their super monies until certain requirements are met. These requirements are called a ‘condition of release’ and the most common is retirement from the workforce from age 55 (for those born before 1 July 1960). There are circumstances where a member may access their preserved superannuation benefits before retirement and we have discussed the main methods below:

Do you have any unrestricted non-preserved benefits?
First step would be to check your super fund statement to see if you have any unrestricted non-preserved benefits as these benefits are able to be withdrawn from your super at any time as they are not preserved. You might have unrestricted non-preserved benefits if you have had a superannuation account for longer than 15 years. For example, personal contributions made to a super fund before 1 July 1999 were not preserved, so its possible members with accounts held before 30 June 1999 may have access to a portion of their superannuation benefit.

Do you meet the severe financial hardship rules?
Another method of accessing superannuation benefits before retirement is via ‘severe financial hardship’. It would be wise to check with your particular superannuation fund as it is possible that the fund may not release benefits under the financial hardship provisions.

There are also specific requirements that must be met in order to withdraw super under this method and this includes that a person:

  • must have been receiving Commonwealth income support payments for a continuous period of 26 weeks; and
  • is unable to meet reasonable and immediate family living expenses.

In addition, under the severe financial hardship provisions if you meet the above requirements the payment must be a single gross lump sum of no more than $10,000 and no less than $1,000 (or a lesser amount if the member’s benefits are less than $1,000). Moreover, only one payment is permitted in any 12-month period.

Are you able to withdraw superannuation benefits under compassionate grounds?
There is an ability to access preserved superannuation benefit via the compassionate grounds condition of release, however not all superannuation funds may allow withdrawal under this condition. There are specific limited grounds for release of benefits under compassionate grounds and this includes that the payment is for medical expenses, to prevent foreclosure of a mortgage on your home, to pay for home or car modifications for severe disability, expenses for palliative care, funeral expenses.

A superannuation fund member who believes they might be eligible for the release of their preserved benefits under compassionate grounds is able to do so through the Department of Human Services.

Termination of gainful employment where the employer contributed to your member account
There is an ability to access superannuation before retirement under a condition of release called “Termination of gainful employment”. This is only available where an employer has contributed to your superannuation fund and the preserved benefits are taken as a lifetime pension which can’t be commuted into a lump sum (unless the preserved benefits are less than $200, in which case the member can cash the benefits without restriction).

Withdrawing superannuation benefits due to Incapacity and illness
Where someone suffers permanent incapacity they are unable to engage in employment for which they are qualified and in this instance they are generally able to have full access to their preserved benefits before reaching preservation age. Also, for members suffering temporary incapacity there is an ability to receive a non-commutable income stream where certain conditions are met. In addition, full access to super benefits will be granted where a member has been diagnosed with a terminal illness and specific requirements have been met.

The experienced staff at Aquila Super are well versed in all of the rules surrounding early access to superannuation benefits. We encourage any SMSF members who may be considering withdrawing money from their accounts to contact us for proper advice on the subject.

Aquila Super