As part of the measures taken by the government to support those impacted by COVID-19 some people will be able to access up to $10,000 of their super between now and 1 July 2020, with a further $10,000 in the first three months of the 2020-21 financial year, tax free.
While superannuation (super) helps people save for retirement, the Government recognises that for those significantly financially affected by the Coronavirus, accessing some of their superannuation today may outweigh the benefits of maintaining those savings until retirement.
Eligible individuals will be able to apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 for approximately three months (exact timing will depend on the passage of the relevant legislation).
While this provides an additional safety net for individuals and families who face the loss of a job or a significant fall in income, we do urge our clients to consider accessing their superannuation as a last resort.
Taking a chunk out of your retirement savings now, after a big market fall, would not only crystallise your recent losses but it also means you would have less money working for you when markets recover.
Eligibility
- you are unemployed; or
- you are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or
- on or after 1 January 2020
- you were made redundant;
- your working hours were reduced by 20 per cent or more; or
- if you are a sole trader — your business was suspended or there was a reduction in your turnover of 20 per cent or more
People accessing their superannuation will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.
How to apply
Applications can be made online from mid-April by using myGov. Members will self-certify that they satisfy the eligibility criteria.
After the ATO has processed your application, they will issue you with a determination. The ATO will also provide a copy of this determination to your superannuation fund, which will advise them to release your superannuation payment. Your fund will then make the payment to you, without you needing to apply to them directly. However, to ensure you receive your payment as soon as possible, you should contact your fund to check that they have your correct details, including your current bank account details and proof of identity documents.
So before you do anything, speak to us and we can help you review other income support measures that may be applicable to your situation.
Did you enjoy this article?
Click below to share it
More News Articles
Get your SMSF ready for 30 June
The rules around SMSFs are strict and if you don’t do things the right way, your fund could end up paying extra tax
Tax Alert June 2022
With attempted GST fraud on the rise and certain family trust payments under a cloud, the tax regulator is stepping up scrutiny of more transactions
Tax Offset vs Tax Deduction: What’s the Difference?
Both can help reduce the amount of tax you pay each year, but a tax offset generally results in a bigger dollar tax saving than a tax deduction of the same amount. The key difference is the point at which they are applied to your income when calculating the final amount of tax payable. What…
Combine Your Super into One Account to Save
Before you change out of a super fund, there are few things you need to do
Federal Budget 2022-23 Analysis
A balancing act Billed as a Budget for families with a focus on relieving short-term cost of living
Avoid the Rush: Get Ready for June 30
Starting early is essential if you want to make the most of the opportunities on offer when it comes to your super and tax affairs
Subscribe to Our Mailing List & Connect Through our Socials
While you may have come to us from a variety of sources, the time has never been better to join us.
Subscribe to our mailing list and connect through out socials to keep up to date with our latest news and get some tips.