Insight Accounting Pty Ltd is a CPA Practice

Beaconsfield (03) 9707 0555

Cranbourne (03) 5995 2700

Pakenham (03) 5940 4555

Warragul (03) 5622 1793

Early release of super savings for an emergency

Your super savings could potentially be accessed for emergencies

Severe financial hardship, terminal illness, specified compassionate reasons, permanent incapacity and other limited circumstances can serve as grounds for withdrawing pre-retirement or preserved super.  Strict rules do apply to accessing these funds.

Overseen by the Department of Human Services, the “early release of superannuation” scheme allows super to be withdrawn in one or more of five specific circumstances, after taking into account a member’s financial capacity.

The scheme provisions stipulate that a member of a superannuation fund seeking funds must provide proof that without access to money from their super fund, the specific emergency expense could not be met.

The trust deeds of the super fund, whether that fund is an SMSF or retail or industry fund, must also permit the payment of this type of benefit.

The special circumstances warranting early release of money from the super fund on compassionate grounds apply where:

-a member, or their dependant, requires medical or dental treatment. Certification is needed from two medical practitioners, including one specialist, that the treatment is essential to treat a life-threatening illness or injury, or to alleviate chronic pain or mental disturbance

-medical transport is required in order for the member or dependant to access the specified treatment. This also needs to be signed off by the same two medical practitioners

-it is needed to pay for a member’s palliative care, or the palliative care, death, funeral or burial costs of a member’s dependant

-home or car modifications are needed in the case of severe disability being suffered by the member or their dependant

-money is needed for mortgage repayments to prevent the forced sale of a home. Proof is required in the form of official notification from the lender that foreclosure is imminent. A maximum of three months’ mortgage repayments and 12 months’ interest on the outstanding loan balance can be made available.

Any tax payable will depend on the components of the benefits released, and may be tax free if you are over preservation age. Release due to terminal illness has no age requirement and is tax free. Check with our office for personalised advice.

 

DISCLAIMER:All information provided in this publication is of a general nature only and is not personal financial or investment advice. It does not take into account your particular objectives and circumstances. No person should act on the basis of this information without first obtaining and following the advice of a suitably qualified professional advisor. To the fullest extent permitted by law, no person involved in producing, distributing or providing the information in this publication (including Taxpayers Australia Incorporated, each of its directors, councilors, employees and contractors and the editors or authors of the information) will be liable in any way for any loss or damage suffered by any person through the use of or access to this information. The Copyright is owned exclusively by Taxpayers Australia Inc (ABN 96 075 950 284)

 

 


Insight Accounting Pty Ltd is a CPA Practice

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