As we have previously blogged, the Government has released various stimulus packages in response to COVID-19 to help the economy withstand and recover from the economic impact of the ongoing pandemic. Unfortunately, many people will lose their jobs or have their income reduced as their regular work hours vary. To assist those in need, the Government has introduced the early release of superannuation funds, but only in particular circumstances.
Am I eligible?
To be eligible for early release superannuation, you must satisfy one or more of the following requirements at the time of application:
- 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, either
- you were made redundant; or
- your working hours were reduced by 20% or more; or
- if you are a sole trader, your business was suspended or there was a reduction in your turnover of 20% or more.
How much can I access?
In normal conditions, you will only be granted early access to your superannuation on compassionate grounds in very limited circumstances. However, during COVID-19 if you satisfy the above criteria you may access up to $20,000 from your fund.
The total amount will be split over the next two financial years, and you may access up to $10,000 of your superannuation until 30 June 2020, and a further $10,000 from 1 July 2020 until 24 September 2020. Any funds released early will be tax free during this time.
How do I access an early release of funds?
Applications for early release of superannuation funds commenced this week, and from 20 April 2020 you can file your request to the ATO through the MyGov website.
Cheney Suthers does not provide financial advice and this blog is for general informational purposes only. We recommend you seek financial advice from your accountant before applying for an early release of superannuation funds.
