Ask LH: Can I Get Access To My Superannuation Right Now?

Hey Lifehacker, Is there any way to access your superannuation before retirement? Would I be able to do that if I had a family emergency or debts to pay off or got the sack and needed to support myself? Thanks, Super Trouper

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Dear ST,

While it's possible to access your super before retirement, the circumstances in which this is permitted are extremely tight. Basically, you need to have a terminal illness, an incapacitating injury or be suffering from severe financial hardship.

You may also be granted early access under certain compassionate grounds, such as costly medical expenses that Medicare doesn't cover. The latter requires you to send an application to the Department of Human Services (DHS) who will assess your case.

To put it another way — to qualify for early superannuation, your life has to really suck hard. Getting fired from your job or struggling with financial debt doesn't really cut it. You'd have to be living in literal poverty for your super fund to consider either of the above reasons. In addition, some super funds have stricter policies, which can make things even more difficult.

While you may well grumble, these tight conditions are in place for a very good reason. The whole point of superannuation is to lessen the burden of age pension payments on the Australian economy while ensuring retirees still have a reasonable standard of living. If everyone was allowed to dip into their superannuation to get out of a temporary jam, lots of people would deplete their savings before retiring, thus defeating the whole point.

Instead of haggling for the keys to your super, your energy would be better expended setting up an emergency savings account. If you find it tough to save money, you can find plenty of helpful advice on our website via the Saving Money tag.

That said, if you legitimately require a portion of your super, the first step is to ask your super fund about whether you may be able to access it before applying. You can find out more information at the Australian Taxation Office website.

See also: How To Break The Living Pay-To-Pay Cycle | Take The 52 Week Money Challenge And Easily Save Almost $1400 | Real-world Money Saving Strategies Cheers Lifehacker

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    Isn't there a way you can also use to aid in purchasing a property? I've heard it's possible but have no idea if it's true or how you would go about it.

      You could have a self managed super fund and that fund could invest in property... Though I suspect there are legalities around that, which would cause issues.

      You want a self-managed super fund. You'll likely spend more in fees and maintenance than you'll make unless you have an inital balance of $200k+. If you have a wife and kids all contributing this is a seriously good option though.

      Source: Fianncial planner

        And it would want to be a fair dinkim investment property so that you can make tax claims and all the rest, otherwise it's likely to be a money sink, and possibly not allowed if it was for a residence.

        Ha - I used to work for a "large egg" dealing with you guys all the time, and I would have to say your screen name is quite apt.

    I remember somthing about getting access to the balance after moving overseas for a few years. This isn't going to be a reasonable option in this case, but does anyone know what the rules are in this regard?

      I think that option is only available to temporary residents, not Australian citizens. Otherwise it kind of defeats the purpose of super because you can come back after living abroad for a few years and have no money for your retirement.

    Some quick and easy answers
    1. Use super to buy a house- NO. If you have a KiwiSaver account in NZ, you can use the Kiwi saver portion to do so, but aussie super is off limits. And yes, you can buy property for an SMSF true- but you then have to rent it out at fair market rent. living in it and charging yourself $1 per year is an awesome way to get the hammer of the ATO on your head and to get your super taxed at 50%.
    2.- Moving overseas - IF and only if that money accumulated in your account while you were a temporary resident and you are now gone from australia, you can access it, and at at a pretty exorbitant tax rate (45%). Aussie citizens, NZ citizens and permanent residents no. Don't whine to the poor person on the other end of the phone, they deal with the same questions every day.

    Source- being the person who had to respond to these complaints. And while i am at it- this is factual information. it isn't advice of any flavor

      Even renting at market rate to yourself or even a friend will be in breach of "in-house assets" and "sole purpose test" and make your SMSF non compliant. Only exception is purchasing "Business Real Property" i.e. purchasing an office/building for your business.

      Source - Financial Planner with an Accounting Degree.

    I can also add, that even if you meet these stringent requirements, many funds will not allow it, regardless, as part of their own rules and regulations.

    I've had a fair chunk (about 10k) of super released after satisfying APRA of severe financial hardship and my fund allowing the release of funds. Over a period of 5 years, my mortgage was in secured recoveries / foreclosure 3 times, the super saved me the first time... it's actually up to date now and has been for over six months. :) While you might find the idea of using super to pay your mortgage/investment property exciting, I assure you, you never want to be in this situation in real life. Satisfying the criteria for financial hardship, whilst still being employed, was very difficult but some really, really bad shit went down.

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