Can I Access My Super In Financial Hardship?

If you’re experiencing financial hardship, you may be able to access a portion your superannuation before you reach preservation age – here’s how it works.

Usually a superannuation fund member can only access their super account once they reach preservation age, but superannuation laws allow for early access to a portion of super in certain extenuating circumstances. Severe financial hardship is one of said circumstances, but there are conditions that need to be satisfied in order for one to qualify for early access.

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What constitutes financial hardship?

According to the Department of Human Services, in order for you to be considered in ‘severe financial harship’, you must be:

  • be unable to pay reasonable and immediate family living costs
  • get an income support payment
  • have been on this payment for at least 26 weeks in a row
  • not get ABSTUDY, Austudy or Youth Allowance

However, there’s a separate set of criteria for those past their preservation date who’ve not yet retired. To be considered in ‘severe financial hardship’, such an individual must be:

  • still be out of retirement – this might mean you’re looking for work, studying or working part time or full time
  • have reached preservation age plus 39 weeks
    • you must have also been on some sort of income support payment for at least 39 weeks in total after having reached your preservation age – you do not need to still be receiving the payment but you must have been on it for at least 39 weeks
  • not get ABSTUDY, Austudy or Youth Allowance
  • have been getting an income support payment

I qualify for early access due to severe financial hardship – what now?

If you meet the requirements for financial hardship, you may still not be permitted early access to your super depending on the fund you’re with. Some funds do not permit early access regardless of circumstances, so be sure to check what your fund’s policy is before going to apply for early access.

The following table contains details of the superannuation funds rated by Canstar based on someone aged 30-39. This table has been sorted by three-year performance (highest to lowest)

Please note that the performance information shown in the table is for the investment option used by Canstar in rating of the superannuation product.

Canstar considers the annual investment returns of a product’s default investment option, including default life-stage options. Where a product does not have a default investment option, annual returns for the investment option with the highest FUM and a 60-80% growth asset allocation are used.

If your fund does permit early access and you have not yet reached preservation age, you may be able to withdraw a lump sum between $1,000 and $10,000, which will be paid and taxed in the same way a regular lump sum withdrawal from super would be. The exception is if your total super balance is less than $1,000, in which case you must withdraw the full amount.

Only one withdrawal can be made due to financial hardship every 12 months, however if you are applying for early access and have reached your preservation age, once approved for early access you may then access your full super balance.

An important step you can take to prepare for your retirement is to do your homework and find the best superannuation fund for your circumstances, to try and ensure your super is enough for you when you need it. You can compare different super funds with Canstar.

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