Early Release of Superannuation Benefits

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Superannuation is generally ‘preserved’ in your fund or retirement savings account (RSA) until you retire from the workforce after age 55. Subject to the governing rules of the fund/RSA, early release of preserved superannuation benefits is permitted in certain restricted circumstances. These circumstances are discussed below.

Financial hardship

Superannuation fund trustees and RSA providers administer the release of benefits on the ground of severe financial hardship according to a simple objective test as well as a subjective test. That is, to be granted an early release you must:

be in receipt of a Commonwealth income support payment, and have been so, continuously, for the last 26 weeks; and
satisfy the trustee/RSA provider that you are unable to meet reasonable and immediate family living expenses.

Commonwealth income support payments include social security or service pensions; certain social security benefits; income support supplements; drought relief payments; exceptional circumstances relief payments; and Commonwealth Development Employment Projects (CDEP) Scheme payments.

If you satisfy both of the above tests, the trustee/RSA provider may, in any twelve month period, release to you one lump sum payment. The lump sum payment is to be no more than a gross amount of $10,000 and no less than $1,000 (or the balance of your benefit if it is less than $1,000).

APRA has produced a set of guidelines to assist trustees and RSA providers in assessing the early release of superannuation benefits on the ground of severe financial hardship and, in particular, the meaning of ‘unable to meet reasonable and immediate family living expenses’. These Guidelines for Trustees (66 kb) are available from this web page in PDF format or may be obtained from any APRA office.

If you are aged 55 years and 39 weeks or more, an alternative, optional, objective test of severe financial hardship may be applied to you. That is, you must:

have received a Commonwealth income support payment for a cumulative period of 39 weeks after reaching age 55; and
not be gainfully employed on a full-time or part-time basis on the date of your application to the trustee/RSA provider.

If you satisfy this test, the trustee/RSA provider may release your entire benefit.

In all cases, as part of the objective test, applicants will need to provide the trustee/RSA provider with a letter from Centrelink, the Department of Veterans’ Affairs or a CDEP grantee organisation confirming that you meet one of these tests.

Severe Financial Hardship and the Superannuation Holding Accounts Reserve (SHAR)

If you have money in the Superannuation Holding Accounts Reserve (SHAR), managed by the Australian Taxation Office (ATO), you need to contact the ATO directly to request the early release of your benefits. For more information, refer to the ATO website at www.ato.gov.au

Information to help you with your finances

An independent, free and confidential financial information service is available from Centrelink. You can ring 13 10 21 for the cost of a local call for information and to make an appointment. Details of this service are included in Centrelink’s homepage at www.centrelink.gov.au.

Specified grounds for release

If you cannot gain early access to your superannuation benefits on severe financial hardship grounds, you may consider asking APRA to approve the release of some or all of your benefits on specified grounds.

There are only very limited circumstances where benefits may be released on specified grounds. These are defined in Regulations and cover expenses in respect of:

medical treatment or transport for the member or his/her dependant where the treatment is necessary to treat a life threatening illness or injury, or to alleviate acute or chronic pain or acute or chronic mental disturbance, and where such treatment is not readily available through the public health system;
to prevent foreclosure of a mortgage, or exercise of a power of sale over the member's principal place of residence;
modifications to the family home and/or vehicle to meet the special needs of a disabled member or his/her disabled dependant; or
palliative care or death, funeral, or burial expenses for a member or his/her dependant.

The legislation also allows APRA to assess applications for Early release of benefits where the circumstances are consistent with, or in direct relationship to, the specified grounds.

Release of benefits to members who meet the specified grounds objective test will still be subject to the governing rules of their fund.

These also apply to superannuation savings held in Retirement Savings Accounts (RSAs).

If you have already applied to APRA for approval, you can ring 1300 13 10 60 for information about your application.

Permanent departure from Australia

From July 2002, temporary residents permanently departing Australia are able to receive payment of superannuation accumulated during their residency. For further information on the conditions for release, please refer to the Australian Taxation Office's Website.

Permanent incapacity

Fund trustees and RSA providers administer release of benefits on grounds of permanent incapacity. The trustee or RSA provider must be satisfied that the applicant is permanently incapacitated before a release can be made.

Terminally ill

Members of superannuation funds, and depositors in Retirement Savings Accounts, who are terminally ill, can apply to have their preserved superannuation benefits released tax free subject to meeting certain conditions.

Applications for release of benefits in these circumstances should be made directly to your superannuation fund or retirement savings account provider.

Minimum threshold of $200 for the preservation of benefits

Members of superannuation funds can access their preserved superannuation benefits on termination of employment, under certain, circumstances, provided that benefit does not exceed $200. Please check with your fund.