Access superannuation

It’s true that superannuation is your money and you have a right to access it.

Usually that right can’t be exercised until you reach the minimum age set by law and you’ve permanently retired. But if you’re experiencing severe financial hardship or have medical, disability or funeral expenses you just can’t afford, you may have the right to apply to have some of your superannuation released early, before you retire.

Accessing superannuation early

Accessing your superannuation early is not something to be taken lightly as there are serious consequences. Here, we’ll explain the advantages and the risks, and explain the process of applying to make sure you go into it with your eyes open.

Early access to superannuation is available because there are times when a person should have access to their money to avoid serious financial harm or to meet certain needs. The grounds for early access are therefore very limited.

You should only consider this option after you’ve considered all other options, and preferably have spoken to one of our financial counsellors.

If you’ve done that, and still see your present need as greater than your future need in retirement, accessing super early may help you get greater control of your debts and/or meet expenses. For example:

you can use your own funds to manage your debt
your lenders and creditors will stop calling you to demand payment and threatening to repossess your home while the payment covers your arrears
you’ll be under less stress

But remember, there are serious consequences (see ‘Risks of accessing your super early’ below).

Eligibility

Most superannuation funds allow access to a lump sum once every 12 months if your application is based on either:

Severe financial hardship
For “reasonable immediate family living expenses” including loan repayments, rent arrears, outstanding bills, car repairs and medical expenses.
Compassionate grounds
To pay medical, disability or funeral expenses; or to prevent the sale of your house by your mortgage holder or the council.

Your super fund is not obliged to release your funds early on either severe financial hardship or compassionate grounds so it is important to check with them first.

If they do not allow early access, and you have spoken to a financial counsellor, considered all your options and are confident that early access is the right thing for your situation – you can switch some or all of your money to a super fund that allows early access and then apply for early access. Just be aware that if you switch funds, your existing super fund will need to turn your investments into cash and this will involve transaction costs. Also consider whether you will lose any insurance cover you have in your current fund and if any insurance available in the new fund will still meet your needs.

How to apply

You can apply in one of three ways, depending on the reason you’re applying:

1. Applying due to severe financial hardship
  If you’re applying for early release of your superannuation on the basis of severe financial hardship or terminal illness, apply directly to your superannuation fund.
  More information
2. Applying on compassionate grounds
  If you’re applying for early release of superannuation on compassionate grounds – such as medical, disability or funeral expenses – your application is processed by the Australian Tax Office (ATO). You will be required to have a MyGov account to complete the process.
  More information
3. Applying to pay mortgage arrears or council rates
  If you’re applying for early release of superannuation to pay mortgage arrears or council rates, your application is processed by the Australian Tax Office (ATO). You will be required to have a MyGov account to complete the process.
  More information

Speak to one of our financial counsellors

If you’re feeling overwhelmed and need some help to deal with your financial hardship, you can speak with one of our financial counsellors.

Financial counsellors aren’t judgmental about your circumstances – they’re here to offer you free, confidential and independent advice and assistance.

To speak to a financial counsellor you can:

Call the National Debt Helpline on 1800 007 007 – open Weekdays from 9:30 am to 4:30 pm.
Use our live chat service by clicking the chat icon in the bottom right corner of your screen. Live chat is available 9:00 am-8.00 pm weekdays. If you send a message outside these hours a financial counsellor will get back to you.
Make an appointment to see a financial counsellor in your local area – Find a local Financial Counsellor.

Risks of accessing your super early

Superannuation scams

An offer to help you get your superannuation money early might seem like a great idea! But these schemes are often illegal.

Be aware that accessing your super before age 55 (at the earliest) is illegal except in very limited circumstances. Don’t be tempted to accept an illegal offer.

MoneySmart shows you how super scams operate so that you can protect your retirement savings.

Less available in retirement

Less superannuation will be available to you in retirement or if you face another period of financial hardship.

Loss of protection from creditors

Funds in superannuation accounts are protected from creditors. However, when funds are released early they lose this protection.

Early access to super withdrawals are taxed

Funds released prior to retirement are taxed. The tax varies depending on your financial circumstances and whether the money in your superannuation fund was a concessional or non-concessional contribution. Your super fund should tell you about any tax payable on withdrawal. See ATO information How tax applies to your super.