Members can access some or all of their preserved benefits before they reach the preservation age in very limited circumstances. The aim of superannuation is to ensure that funds are preserved for a person’s retirement, but it is recognised that there may be overriding situations.

There are a number of ways that superannuation funds can be accessed prior to a person’s preservation age, and the grounds for early access overlap somewhat. It is therefore essential to read the information carefully, and be aware that not all superannuation funds permit early release.

Superannuation schemes established for members of the public service are established under their own rules, and application should be made direct to the fund.

Compassionate Grounds

The rules for the early access to superannuation under compassionate grounds are set out in regulation 6.19A of the Superannuation Industry (Supervision) Regulations 1994 (Cth).

The following is a summary only of the process to release funds on compassionate grounds and further information about accessing superannuation early can be found on the Australian Tax Office website.

Compassionate grounds include:

Not all superannuation funds permit early release of funds on compassionate grounds and it essential to check first with the fund before beginning the process. The fund should also be able to confirm the tax which must be paid if the member is under the preservation age and if there are any fees payable.

Certain information is required to satisfy the fund that all criteria are met. For example, medical reports may be required, or in the case of the release of superannuation to prevent the sale of a home, the lender may need to provide a letter.

The ATO will assist with an application for release and does not charge for the service.

Severe Financial Hardship

Funds may be released early if the member is suffering from severe financial hardship. The member must have been on eligible income support payments continuously for at least 26 weeks, and be unable to meet reasonable and immediate family expenses. A maximum of $10,000 per 12 month period may be accessed.

There may be tax implications of accessing funds early and this may also affect a person’s other entitlements. It is best to get advice first before applying to ensure that there are not unintended consequences.

Further information about accessing superannuation early on the grounds of severe financial hardship may be found on the Department of Human Services website.

Other Grounds

There are a number of other situations where a superannuation fund may permit early release, including:

Further information about release on these grounds may be obtained from the ATO website or direct from the superannuation fund.