The Australian Prudential Regulation Authority (APRA) today warned members of superannuation funds not to engage the services of individuals or companies promoting early access to preserved benefits before retirement.

APRA has received an increased number of enquiries about early release schemes, making specific reference to recent advertising campaigns in a number of states and to the substantial fees being charged by the promoters, usually in the form of a percentage of the members benefit.

Government legislation permits the early release of benefits only in very limited circumstances. Obtaining the unlawful release of superannuation benefits would normally involve committing a criminal offence and could expose the recipient to taxation liabilities and financial penalties under the Income Tax Assessment Act.

The final decision for early release of benefits to members lies with their superannuation fund, where permitted under the funds governing rules as well as under the superannuation legislation. APRA advises superannuation members legitimately requiring access to their preserved benefits to contact their fund regarding the relevant terms and conditions for the early release of their superannuation prior to submitting an application.

Superannuation members can only apply for the early release of their benefits according to their individual circumstances. There are only two grounds for early release:

• financial hardship or
• specified compassionate grounds

Applications for the release of benefits due to financial hardship are entirely administered by superannuation fund trustees. In general terms, benefits released early under financial hardship are targeted for everyday living expenses and are limited to one payout of no more than $10,000 including tax during a twelve month period. The superannuation fund can only pay an early benefit if:

• the member has been receiving Commonwealth government income support for at least 26 weeks without any break and has a letter to this effect from the paying agency;
• the trustee of the members fund is satisfied that reasonable and immediate family expenses cannot be met; and,
• the rules of the fund allow the payment

Applications made on specified compassionate grounds are processed by APRA. Early benefits can only be released by the superannuation fund if APRA approves the application and if the rules of the fund allow the payment. Under the specified compassionate grounds, the law states that benefits can only be released early to pay for expenses related to the following:

• medical treatment;
• medical transport;
• home or motor vehicle modifications required because of severe disability;
• palliative care or associated expenses;
• mortgage repayments to prevent the mortgagee from selling the property; or
• expenses consistent with one of the above.

Further information on legislation regarding the early release of benefits or on criteria for specified compassionate grounds is available through APRAs Contact Centre or on the APRA website at http://www.apra.gov.au/Superannuation/Early-Release-of-Superannuation-Benefits.cfm

APRA is the prudential regulator of the financial services industry including banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry. It currently regulates $1.6 trillion in assets for 20 million Australians.

For further information:	Media and industry inquiries only:
APRA Call Centre	Susan Morey
1300 131 060	APRA - Public Affairs
	02 9210 3384
	0438 124 524