Early access to superannuation due to COVID-19

Early access to superannuation due to COVID-19

 

Individuals affected by the coronavirus can access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21. You will be able to apply for early release of your superannuation from mid-April 2020.

 

While superannuation helps people save for retirement, the Government recognizes that for those significantly financially affected by the coronavirus, accessing some of their superannuation today may outweigh the benefits of maintaining those savings until retirement.

 

Eligible individuals will be able to apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 for approximately three months (exact timing will depend on the passage of the relevant legislation).

 

Eligibility

 

To apply for early release, you must satisfy any one or more of the following requirements:

 

  • you’re unemployed
  • you’re 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
  • on or after 1 January 2020
    • you were made redundant
    • your working hours were reduced by 20 per cent or more
    • if you’re a sole trader, your business was suspended or there was a reduction in your turnover of 20 per cent or more.

People accessing their superannuation will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.

 

How to apply

 

If you’re eligible for this early release, you’ll be able to apply directly to the Australian Taxation Office (ATO) through the myGov website. You’ll need to certify that you meet the above eligibility criteria.

 

After the ATO has processed your application, they’ll issue you with a determination. The ATO will also provide a copy of this determination to your superannuation fund. This will advise them to release your superannuation payment. Your fund will then make the payment to you, without you needing to apply to them directly.

 

However, to ensure you receive your payment as soon as possible, you should contact your fund to check that they have your correct details, including your current bank account details and proof of identity documents. Separate arrangements will apply if you are a member of a self-managed superannuation fund (SMSF).

 

Contact Expert Tax on 0449 952 855 or 1300 869 829 for tax related queries.