Early Access to Super Due to COVID-19

One of the many detrimental impacts that has resulted from COVID-19, is widespread job losses all over Australia and the world.

To combat this huge blow to our economy the government introduced one particular way for people to continue to make ends meet by giving us the ability to withdraw from our Superannuation funds.

This is something that can benefit certain people under the right conditions. You would have been able to access up to $20,000 all up, with the period for the first $10,000 having already lapsed as of July 1. The second period that brings access to the other $10,000 is open now between July 1 and September 24.

The following certain criteria must be met to satisfy eligibility for the withdrawal:

1.     You are unemployed

2.     You are eligible to receive a job seeker payment, youth allowance for job seekers, single or partnered parenting payment, special benefit or farm household allowance; or

3.     On or after 1st January 2020

·      You were made redundant

·      Your working hours were reduced by 20% or more; or

·      If you were a sole trader, your business was suspended or there was a reduction in your turnover of 20% or more.

The application process is made through MyGov and administered by the ATO who then directs your superannuation fund to release the payment upon your applications approval. The money withdrawn can be made up of funds spread across multiple super funds and will not incur any tax penalty for the entire amount withdrawn.

Be aware that any falsifications made to secure the withdrawal can be easily picked up by the ATO and you will run the risk of them adding that amount onto your assessable income forcing you to pay tax on it.

It is very important to be mindful that a $10,000 withdrawal from your super account could amount to upwards of a $40,000 reduction in your balance over the next 20 years and could greatly impact your retirement.

If you are suffering financial hardship, I suggest you arrange a time to speak with your financial planner to work out a detailed cashflow projection to calculate any shortfall between your income and your expenses over the next 6 months, so as to only take out what is necessary.

Feel free get in touch on 0423 313 486 or kate@solacewealth.com to see how I may be able to assist you.

Kate Trost

Senior Financial Adviser and Director of Solace Wealth Management (AR numbers 465078/1262350)

Authorised Representative of Avana Financial Solutions (AFSL 516325).