One aspect of the Australian Government’s stimulus package was allowing individuals adversely affected by the economic effects of the Corona Virus to access up to $10,000 of their superannuation monies in both the 2020 financial year and the 2021 financial year.
The ability to access this money under early release compassionate grounds is hoped to ease the financial burden that many within the community are experiencing. This measure will be extremely important to a number of people and you can now apply for early release online through your MyGov account. Below we have set out the eligibility rules and the process of applying for the early release money.
Can I Access my Superannuation on Compassionate Grounds due to COVID-19
You can access up to $10,000 in the 2020 financial year ending 30 June 2020 and a further $10,000 in the 2021 financial if:
- You are unemployed
- You are eligible to receive the Job Seeker payment, youth allowance for Job Seekers, Parenting Payment or special benefits under the Social Security Act
- You are eligible to receive the farm household allowance under the Farm Household Support Act 2014
- On or after 1 January 2020 you:
- were made redundant
- your working hours were reduced by 20% or more
- if you are a sole trader, your business was suspended or there was a reduction in your turnover of 20% or more
If you are eligible to apply, you can lodge an application with the Australian Taxation Office from 20 April. Where you are making a claim for the 2020 financial year your application for early release must be made on or before 30 June 2020 (Note: the application must be lodged; the physical payment in relation to the application may be paid after 30 June but that will not effect your ability to apply for a second release between 1 July and 23 September 2020).
As well as being able to make a claim in the 2020 financial year, you can also apply for to access up to a further $10,000 provided that you continue to satisfy the eligibility rules set out above and the application is lodged with the ATO on or after 1 July but before 23 September 2020. The actual payment may occur outside the application time frame but it is imperative that the application be lodged during this time frame.
How do I apply for the Early Release?
To apply for the early release of up to $10,000 of your superannuation benefits you must apply to the ATO through your MyGov account. If you do not have a MyGov account then you will need to set a MyGov account up online.
Before applying please note that only one application can be lodged in the 2020 and 2021 financial years. You can request an early release payment of up to $10,000 per financial year (within the time frames mentioned above). If you request a payment of less than $10,000 in a particular financial year, you cannot apply for a further payment in that financial year. As such, if you should consider applying for the full $10,000, and if you do not need the additional money, you can always recontribute the money later in the financial year.
The online form under MyGov will display all of your superannuation accounts. You can request a release of your superannuation entitlements from up to 5 of your superannuation accounts. Before lodging the form it would be wise to double check your current balance with each fund before nominating more than 1 fund.
Finally, also double check to ensure that the correct bank details have been provided in the application. That is, double check the BSB and account number before completing the application.
Once you have lodged your application through your MyGov account it will take up to 4 business days to process the application and send you a letter of approval or rejection to your MyGov inbox. If the application has been approved your nominated Fund (after your fund receives notification from the ATO) will then process the payment to you. You should not have to contact the Fund.
The regulatory body (APRA) has issued guidance to Superannuation Funds to pay the early release payment to members within 5 business days of receiving notification from the ATO. If you have not received payment with 7 business days after you received approval via your MyGov inbox, we recommend that you contact the superannuation fund directly to follow up the payment.
Should you have any queries regarding early release of your superannuation please do not hesitate to contact either our office on 03 96291433 to discuss.