IVF can come with a significant financial burden and may be inaccessible for some. As a result, accessing super early has become an option for funding the procedure.
Despite the fact that superannuation is intended for retirement, there are conditions that exist to facilitate early access. Statistics from the Australian Taxation Office revealed that early release on medical grounds was the most common reason for people applying to access their super. However, it is important to check with your fund, as not all super funds will allow early access.
When can you access your super early to pay for IVF?
Early access to super for IVF treatments is typically sought under ‘compassionate grounds’. In order to be considered, you must satisfy the ATO’s medical (treatment or transport) eligibility criteria.
These criteria dictate that you or your dependant must have:
- A life-threatening illness/injury
- Acute or chronic pain, or
- Acute or chronic mental illness
In addition, the treatment must not be readily available through the public health system and your application must include supporting reports from two registered medical practitioners. The ATO says that it will only consider one IVF treatment per application.
With regards to IVF, claims for early access are often made under the mental health provision. If you can show, with the certification of medical practitioners, that you are suffering mentally due to infertility, you may be eligible for early release of super.
Accessing your super for other reasons
There are also other circumstances in which you may be able to access your super before reaching your preservation age. These are generally associated with medical complications or significant financial hardship.
According to the ATO, you may be able to gain access to your superannuation on compassionate grounds if you or a dependant requires money for one of the following purposes:
- Medical treatment or transport
- Costs related to a death/funeral
- Palliative care
- Severe disability necessitating modifications to your home or vehicle
- Loan payment to prevent losing your home
It is important to note that the ATO will only approve early access to cover unpaid expenses, and that the amount you withdraw will be limited to what you reasonably need. Additionally, each of the circumstances above have specific eligibility requirements.
Severe financial hardship
If you are experiencing severe financial hardship, you may be able to access your super early (up to $10,000) to help alleviate your issues. The ATO explains that to be eligible, you must have received government income support payments for 26 weeks continuously. Only one withdrawal on these grounds can be made in any 12-month period.
In addition, the ATO says that early access to super may be granted due to a terminal medical condition, temporary or permanent incapacity, or in certain situations where an individual’s balance is below $200.
How to apply for early release of your super for IVF
Currently the application process for early access varies depending on the grounds you claim. Those applying for access on compassionate grounds, such as IVF clients, must direct their applications through the ATO. Applications can be made online at my.gov.au. and can take up to 14 days (28 days for paper applications). If approved, you must then contact your super fund to organise the release of funds.
Should you apply for early access to your super?
It’s important to consider the potential short and long-term implications.
A possible upside to gaining early access to your super is that it may enable you to resolve a serious issue in the short term, such as helping to pay for IVF.
However, a possible downside is that by solving a current problem, you could potentially create a future problem by reducing the size of your retirement benefit. Superannuation is designed to fund your retirement, and early access may potentially impact your quality of life down the track.
It could be a wise idea to seek suitably qualified financial advice.
Other key considerations
The path to applying for early access to super can be lengthy, complex and an emotionally-challenging undertaking. It may be difficult to predict whether your claim will be approved as the eligibility criteria are fairly strict. It’s for this reason that there are companies who, for a fee, offer to help facilitate the process for you. It’s important to note that these companies typically use the same application process you would follow if you were applying yourself.
It may be worth carefully considering whether you need to involve a third party, such as a legal expert, depending on your circumstances.
Also, be aware that the ATO warns consumers of illegal schemes that claim to offer early access by transferring your super into a self-managed fund, and heavy penalties can apply to those who participate in these schemes.
About Dominic Woolrych
Dominic Woolrych is the CEO of online legal platform, Lawpath. He’s a lawyer with prior experience at international law firm, MinterEllison. Dominic is an Adjunct Professor at the University of Technology, Sydney and previously worked as a criminal solicitor at the Public Interest Advocacy Centre and at the International Court of Justice.
Sub edited by Milan Cuk.
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