For most of us we don’t give a heap of thought to our superannuation till we get closer to retirement, or maybe once a year when we got out statement.
If you’re thinking about accessing your superannuation before retirement, its usually because somethings gone wrong and you’re under some financial pressure. In this blog/vlog we’ll go through some of your options and how they work.
COVID-19 superannuation early release conditions
COVID-19 has caused a lot of financial stress with many of us either being stood down from work, losing our job all together or working reduced work hours.
To assist the Government has introduced new measures that offer those experiencing financial difficulty the option to access two amounts of up to $10,000 from their superannuation, as long as you meet the criteria. The first $10,000 is accessible during the 2019/2020 financial year, the second will be available between 1 July and 24 September 2020.
What are the qualifying criteria?
To qualify, you’ll need to meet one of the following conditions:
- You are unemployed or were made redundant
- You are eligible for job seeker payment
- Your working hours reduced by more than 20%
- For sole traders, your business was suspended or you had a 20% reduction in turnover
How do you apply for the COVID-19 early release?
Applications are done via the MyGov website and your linked ATO account. If you don’t have MyGov, you will need to register and link it to your ATO account.
When you got into your ATO profile via MyGov there should be a prompt at the top of the screen with more information and prompts to assist you with the application process.
Assuming you’re approved, the ATO will automatically send a request to your super fund and funds should be deposited into your bank account within 5 business days. Although in some cases there may be delays.
A couple things to be aware of
- Withdrawing money from superannuation is likely to have a significant impact of the amount of superannuation you will have at retirement and could mean you will have to work longer
- Due to the recent market downturn, you’ll likely be withdrawing funds that have made a loss and won’t have a chance to recover once withdrawn
- You may risk losing insurance held within your superannuation
If you do take advantage of the COVID-19 early release measures, as things return to normal it may be worth considering your options to grow your superannuation again and begin to get your superannuation back on track.