Applying due to severe financial hardship

You may be eligible to withdraw some of your super early due to severe financial hardship.

The funds can be used to pay outstanding bills. They can’t be used to pay day-to-day living expenses, or cover debts that are not currently due, such as the full balance of a credit card or personal loan (unless you have received a Notice of Demand from your creditor).

Any super you withdraw for this purpose will be taxed and the tax amount will be deducted from the lump sum payment.  The tax rate varies depending on your age and other factors.  On average, tax of approximately 22% will be deducted.

Remember, if you need help with living expenses, charities can help you with:

• food, transport or chemist vouchers
• rent or accommodation
• part-payment of electricity, gas or water bills
• food parcels or clothing
• budgeting or referrals to other programs.

You can find your closest service on the Ask Izzy website.

It may be tempting to view accessing your super early as an easy solution, but there are risks. Before applying call 1800 007 007 and speak to one of our financial counsellors about your situation, to talk through all of your options.

Eligibility

Super is meant to be for retirement and as a general rule can only be accessed once you reach your preservation age and are actually retired. But you can access it before your preservation age and retirement, if you meet certain criteria.

As a first step, look at the table below to work out your preservation age.

The rules for accessing your super early due to severe financial hardship depend on your age.

If you have not yet reached your preservation age 

You can apply to withdraw between $1,000 and $10,000 from your superannuation account if you are:

• receiving an eligible Commonwealth income support payment from either Centrelink or the Department of Veterans’ Affairs (DVA) and you’ve received that payment for the last 26 consecutive weeks;
• unable to meet reasonable and immediate living expenses; and
• able to provide evidence of debts and expenses to support your application.

If you have less than $1,000 in your account, you can withdraw the full amount.

You can only make one withdrawal from your super due to severe financial hardship in any 12-month period.

After you have reached your preservation age  

You can withdraw some or all of your super if you:

• have been receiving a Commonwealth income support payment for a cumulative period of 39 weeks or more since reaching your preservation age; and
• are not gainfully employed on a full-time or part-time basis.

If you meet these requirements, you may apply for a release of funds as many times as you need in a 12-month period.  Further, there are no restrictions on the amount you can request to be released.

How to apply

Before applying, contact your super fund and check that they will release your super on severe financial hardship grounds.  Your superannuation fund is not obliged to release your funds early if their policy does not allow early access. If you are in this situation, call 1800 007 007 and speak to one of our financial counsellors.

To apply you will need to write to your superannuation fund and:

• explain why you’re in severe financial hardship;
• demonstrate that you meet the eligibility criteria above including providing copies of specific bills that you need to pay;
• provide a letter from Centrelink or DVA confirming you have received eligible income support payments continuously for 26 weeks or more (39 weeks if you have reached your preservation age). This letter is called a Q230 Financial Hardship letter; and
• other information that your super fund requires as evidence of your severe financial hardship.

You can call Centrelink on their regular payment line to request that they provide you with a Q230 Financial Hardship letter.  The letter is only valid for 21 days so make sure you give it to your super fund within that time.

Some super funds are able to check if you meet the income support requirements online directly with Centrelink, but you must agree to them doing this.  This means you won’t need to contact Centrelink for a Q230 Financial Hardship letter.

If your super fund is not satisfied with your application or that accessing your super will assist with your financial hardship, they may not approve your application.

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 to 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.