February 14, 2017 by Trish Power
Copied from www.superguide.com.au
Q: I am in financial hardship. Can I withdraw my super to pay expenses?
A: Yes, in certain circumstances individuals suffering ‘severe financial hardship’ may be able
to access a portion of their super benefits.
You must apply to your super fund to claim early access to your super benefits on the basis
of severe financial hardship. Note that even if you satisfy the conditions for early access to
super benefits due to ‘severe financial hardship’ you may belong to a super fund that doesn’t
permit access on these grounds. As a preliminary step, check with your super fund to confirm
whether they permit benefit withdrawals under the ‘severe financial hardship’ rules.
You must satisfy certain conditions for early access to super benefits based on ‘severe
financial hardship’, which are outlined in a special regulation of the super laws (Sub-regulation
6.01 (5) and (5A) of the Superannuation Industry (Supervision) Regulations 1994).
You can claim your super early based on severe financial hardship, if you satisfy one of the
following two scenarios:
1. Received Commonwealth income support for 26 weeks and cannot meet reasonable and
immediate family expenses. Schedule 1 of the SIS Regulations 1994, stipulates that you
can access up to $10,000 of your super benefit in each 12-month period, and a minimum
of $1,000. The 12-month period starts from the first payment.
2. Reached preservation age (age 55 for those born before July 1960, and at least age 56 for
those born on or after 1 July 1960) and received Commonwealth income support payments
for 39 weeks (cumulative) after the person reached preservation age. Can access full super
benefit if required.
For more detail of the requirements for the two scenarios above, please continue reading.
1. Commonwealth income support for 26 weeks
You are in ‘severe financial hardship’ under the super laws if the trustee of your
superannuation fund is satisfied of the following two facts:
▪ You have received Commonwealth income support payments for a CONTINUOUS period
of 26 weeks. You can confirm this with written evidence provided by Centrelink or another
Commonwealth department or agency (if relevant) responsible for the income support
payments, and you must be in receipt of the income support when the written evidence is
prepared. Income support includes New Start allowance, Disability Support, parenting
payment, carer’s payment, and widow allowance, but in this instance, does not include Aus
study payments, or Youth Allowance paid to students in full-time study, AND.
▪ You are unable to meet reasonable and immediate family living expenses.
If your super fund’s trustee considers that you satisfy the above requirements, you can access
up to $10,000 in each 12-month period, and a minimum of $1,000 (unless your super benefit
is less than $1,000 and then you must withdraw the entire amount).
2. Reached preservation age & Commonwealth Income support for 39 weeks
Alternatively, you are in ‘severe financial hardship’ under the super laws if you satisfy the
▪ you have reached your preservation age (age 55 for those born before July 1960, and at
least 56 years for those born on or after 1 July 1960). For information on your preservation
age see Super Guide article
▪ you have been in receipt of Commonwealth income support for a CUMULATIVE period of
39 weeks after you reached your preservation age, and this is confirmed by written
evidence provided by at least one Commonwealth department or agency responsible for
the income support payments.
▪ if you are working, you are working fewer than 10 hours a week. More specifically, at the
date of the early access application, you were NOT gainfully employed on a full-time or
part-time basis. Part-time work is defined to mean at least 10 hours a week, and less than
30 hours each week.
If your super fund permits early access on the basis of severe financial hardship, and you
satisfy the above age, work and income support requirements, then you can access your
ENTIRE superannuation benefit.
Note: The letter or form from Centrelink (or other government department or agency)
confirming your income support history must be dated no earlier than 21 days before you
submit your application for early release to super fund. In other words, be sure to make your
application as soon as possible after receiving written confirmation from Centrelink about your
income support. According to Centrelink, rather than submitting a letter, you can arrange for
your super fund to check your eligibility for income support by using Centrelink’s Customer
Confirmation eService (if you have given your super fund permission to do so, and assuming
your super fund has registered for the eService).
Need help to release super for financial hardship telephone Release My Super
1300 090 261 or email email@example.com for further information.
BY ROBERT RUSHFORD
SENIOR PARTNER RELEASE MY SUPER