From 20 April 2020, people affected by the COVID-19 pandemic may be eligible to apply to access up to $10,000 of their super in 2019-20 and a further $10,000 in 2020-21.
In the main, superannuation benefits are preserved. That is, they cannot be accessed until a condition of release have been met. Conditions of release include events like retirement, turning 65, becoming permanently incapacitated and the like.
There are some circumstances where superannuation benefits may be released early, such as in cases of severe financial hardship and on compassionate grounds.
To be eligible for the early release of funds a person must:
- Be unemployed, or
- Be eligible to receive a Jobseeker Payment, Youth Allowance Jobseeker, Parenting Payment, Special Benefit or Farm Household Allowance, or
- Since 1 January 2020:
- they were made redundant, or
- their working hours were reduced by 20% or more, or
- if a sole trader, their business was suspended or suffered a reduction in turnover of 20% or more.
Before accessing your super, it is important to consider two things:
- Accessing your super benefits early will reduce the amount that is available for retirement, and
- Accessing superannuation early that results in an account being closed, or reduces an account balance to less than $6,000, may result in the loss of valuable insurance cover.
To estimate what a reduction in your super could mean for you, head to the money smart website to calculate the affect a move like this will mean for your retirement savings.
Please Contact us if you are considering to this, our financial advisers are all over the current economic stimulus and can help you get a plan in place to get through this hard time.