Accessing Your Super Early During COVID-19
If you plan to access your super for COVID-19 early release, or you have questions regarding the requirements you need to prepare to access it, below is some helpful information on how you can go about this process.
Australian and New Zealand citizens and permanent residents who are eligible can apply once in the 2020 to 2021 financial year and can withdraw up to $10,000 of their super.
However, there are certain requirements you need to meet to be eligible for the COVID-19 early release of your super.
You can apply to withdraw from your super as long as you meet one or a combination of the following conditions:
- You are currently unemployed.
- You are qualified to receive JobSeeker payment, Youth Allowance for jobseekers, parenting payment, Special Benefit, or Farm Household Allowance.
- You were dismissed from your job, or you have had your work hours reduced by 20 per cent or more. If you are a sole trader, your business was suspended or there was a reduction in your turnover of 20 per cent or more ON OR AFTER 1 JANUARY 2020.
While there is no need to attach any documents or proof to support your application, you still need to prepare records, documents or evidence to confirm your eligibility.
These can include bank statements, payslips, communication from your employer, separation certificate, cash flow and turnover records (for business owners), digital or public announcements regarding business closure, etc.
Possible implications of early withdrawal
Note that if you meet the requirements under the COVID-19 early release of your super, there will be no need to include the amount you receive in your tax return, so you won’t be taxed for it. It also has no bearing on Centrelink or Veterans’ Affairs payments. However, amounts disbursed due to other compassionate grounds need to be filed with your income tax.
Also, if you decide to access your super early, you will be reducing your super balance, which can also affect your projected retirement income. It may also impact your income protection insurance, as well as your life and total permanent disability insurance cover. Moreover, accounts that have a low balance may not be covered by insurance.
If you have any questions about accessing your super due to COVID-19 or need financial advice, please get in touch with us at Alliance Accounting. We’ll be happy to assist you.