As you may have heard, the government has recently allowed early access to superannuation funds in response to the coronavirus and its economic implications.
How do I check my eligibility?
Eligibility to apply for early release you must satisfy any one or more of the following requirements:
-You are unemployed; or
-You are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or
-On or after 1 January 2020: you were made redundant; or your working hours were reduced by 20 per cent or more; or if you are a sole trader — your business was suspended or there was a reduction in your turnover of 20 per cent or more.
The application for early release of super as a result of COVID-19 is made through
my.gov.au
How much can we withdraw?
You can access up to $10,000 from your superannuation accounts during this financial year (2019 – 2020) which ends 30th June 2020. You can then apply for another $10, 000 in the next financial year their super this financial year (2019-2020) and up to $10,000 in the next financial year (2020-2021).
Will the super withdrawal be taxed?
No, the super funds that are released early will not be taxed.
Will my Centrelink Payments Stop If I take out my Super funds?
No, this will not impact your Centrelink eligibility.
How will this impact my Superannuation Funds?
While we understand the Government’s financial hardship measures, we want you to be fully informed before you make a decision. We understand that many people are in financial hardship right now and may be considering taking out their superannuation funds, but please keep in mind that taking out a significant amount of your superannuation will have consequences. Potentially, you could lose your insurance for TPD, Life Insurance and Death Cover if you take out all or most your super funds.
Moreover, If you withdraw a significant amount eg $10,000 or more, whilst it may not seem like a huge amount right now, it could reduce your super balance for your retirement. This is because super funds are invested and grown by your fund and if the base amount is reduced, it could lead to a significant reduction in your total superannuation for retirement.
Speak to a lawyer at Shaheen Legal
We understand that for some people, the financial stress during this time is difficult to manage. At Shaheen Legal, we recommend you consider other alternatives to ease your financial burden before looking at early access to superannuation. Find out if you are eligible for Centrelink payments or if you can negotiate rent reductions or mortgage freezes temporarily. We understand that this is a very uncertain time for all of us and we are here for you.
If you want to discuss anything related to your superannuation or Insurances,
Give us a call at Shaheen Legal on (02) 9854 5552
