To say that 2020 was a financially taxing year for many is a gross understatement. This year will go down as one of the most collectively difficult times in modern history. For that reason, there have been a number of initiatives introduced by the Aussie Government in an effort to support struggling families.
One of those options has been the choice to access some of your superannuation funds early.
As you may recall, there have been two rounds of this program. The first ended 30 June 2020, and the second will end 11.59 pm Australian Eastern Daylight-saving Time (AEDT) on 31 December 2020 (at the time of writing, that is tomorrow).
Who is eligible for early superannuation withdrawal?
As the ATO writes, “Eligible citizens and permanent residents of Australia and New Zealand can submit one application, through ATO online services in myGov”. This service has been introduced for those who have been impacted financially during the COVID-19 crisis and need assistance.
Moneysmart.gov.au states that funds may be released if you meet one or more of the following qualifiers:
- you are unemployed
- you are eligible to receive a JobSeeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance
- on or after 1 January 2020, either
- you were made redundant
- your working hours were 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
For those able to withdraw money from their superannuation funds, the minimum amount is $1,000 and the maximum withdrawal is $10,000. Only one withdrawal is permitted in any 12-month period.
If you choose to withdraw some of your super, the ATO states that you will not need to pay tax on the amounts you access. The funds will not need to be included in your tax return, either.
It should be noted that temporary residents of Australia are not eligible for early superannuation withdrawal.