Early release of Superannuation
Superannuation is ‘preserved’ in the member’s Employer Fund until retirement from the workforce after age 55.
A member may apply to APRA (Australian Prudential Regulation Authority) for approval of early release for superannuation benefits on specified grounds by completing the required application form. If the application is successful, the member will receive a letter from APRA. They can then send the letter from APRA, along with a letter from themself stating the withdrawal amount, to the Employer Superannuation Fund for processing.
*Note: Member will initially need to contact the relevant Employer Fund in order to establish the governing rules of the fund in relation to early release.
Only once it has been established that the fund will facilitate early release of member benefits, in specified circumstances, should the member pursue the avenue with APRA.
These circumstances include:
‘Financial hardship’ grounds for release
Superannuation fund trustees administer the release of benefits on the grounds of severe financial hardship according to a simple objective test as well as a subjective test.
That is, to be granted an early release you must:
- be in receipt of a Commonwealth income support payment, and have been so, continuously, for the last 26 weeks
- satisfy the trustee that you are unable to meet reasonable and immediate family living expenses.
Commonwealth income support payments include social security or service pensions; certain social security benefits; income support supplements; drought relief payments; exceptional circumstances relief payments; and Commonwealth Development Employment Projects (CDEP) Scheme payments.
If you satisfy both of the above tests, the trustee may, in any twelve month period, release to you one lump sum payment. The lump sum payment is to be no more than a gross amount of $10,000 and no less than $1,000 (or the balance of your benefit if it is less than $1,000).
Specified ‘compassionate’ grounds for release
If you cannot gain early access to your superannuation benefits on severe financial hardship grounds, you may consider asking APRA to approve the release of some or all of your benefits on specified grounds.
There are only very limited circumstances where benefits may be released on specified grounds.
These are defined in regulations and cover expenses in respect of:
- medical treatment or transport for the member or his/her dependant where the treatment is necessary to treat a life threatening illness or injury, or
- to alleviate acute or chronic pain or acute or chronic mental disturbance, and where such treatment is not readily available through the public health system; or
- to prevent foreclosure of a mortgage, or exercise of a power of sale over the member’s principal place of residence;
- essential modifications to the family home and/or vehicle to meet the special needs of a disabled member or his/her disabled dependant; or
- required palliative care or death, funeral, or burial expenses for a member or his/her dependant.
Additional grounds include:
- Permanent departure from Australia
- Permanent incapacity
- Terminally ill but do not meet any other grounds
- Small balance threshold of $200 for the preservation of benefits
Contact details for APRA as below:
Telephone: 1300 131 060 Mailing Address: GPO Box 9836, Canberra ACT 2601 Web: www.apra.gov.au