Early release of superannuation Information on accessing your superannuation before retirement age www.apra.gov.au Australian Prudential Regulation Authority
What this brochure is about In Australia, superannuation generally cannot be accessed before you are 55 years old. This is to ensure that all Australians can fund themselves in retirement. However, in some very specific circumstances, the law does allow you to access your superannuation early. This brochure outlines the situations in which the Australian Government will allow early release of superannuation benefits. These benefits may be held in superannuation funds or Retirement Savings Accounts (RSAs). Note that in most circumstances, superannuation benefits that are released early are taxed. The tax rate is usually between 20% and 25%, but is subject to change. Superannuation fund trustees have the final say The Australian Government may give you permission to access your superannuation early. However, this doesn t mean that the superannuation fund trustee the organisation that holds your superannuation funds must release your benefits to you. It is up to your superannuation fund trustee (or RSA provider) to decide what benefits they will and will not release. Be aware that the superannuation fund trustee/rsa provider may charge you fees for the early release of your superannuation. 1
What to do first If you need access to your superannuation, the first thing you should do is contact the trustee or provider of your superannuation fund or Retirement Savings Account, and ask them: Are there any circumstances under which you allow early release of superannuation? If your trustee/provider says no If your fund trustee/rsa provider says they will not allow early release under any circumstances, then there is nothing APRA or any other Australian Government agency can do to force them to pay out some or all of your benefits. We suggest you contact Centrelink and/or a financial counsellor, to see what other assistance you might be able to obtain. Contact Centrelink on 13 10 21 or visit www.centrelink.gov.au for more information. If your trustee/provider says yes Find out under what circumstances your fund trustee/rsa provider will allow early release of superannuation. Then, use the following pages of this brochure pages 3 and 4 to find out what to do next. 2
What is your situation? There are a limited number of circumstances in which your superannuation can be released early. The reasons for early release of superannuation are called grounds. Different grounds are handled by different organisations. The following information explains which organisations look after the grounds that apply to you. Help from APRA If you need the money to: pay for medical or dental expenses, for you or a dependant of yours; pay for transport to medical or dental treatment, for you or a dependant of yours; prevent your home from being sold by the lender that has the mortgage for it; modify your home or vehicle to accommodate your own needs, or the needs of a dependant, in the case of severe disability; pay for expenses associated with caring for a person with a terminal medical condition (i.e. palliative care), be it for yourself or a dependant; or pay for expenses associated with a dependant s death, funeral or burial; then you can apply to the Australian Prudential Regulation Authority (APRA) for release of your benefits on specified compassionate grounds (see page 5 onwards). Note that payments against vehicles, utilities, credit cards or other personal debt are not specified compassionate grounds, unless they are related to one of the above situations. 3 If none of the reasons on this page match your situation, read the next page for other ways you may be able to access your superannuation early.
Help from your trustee/provider If you: are experiencing severe financial hardship; have been permanently incapacitated (permanent and total disability); are terminally ill; or have a preserved benefits balance of $200 or less; then you can apply directly to your superannuation fund/rsa for early release. Note that if you are terminally ill, you can access all of your benefits tax free. Help from the ATO If you were in Australia temporarily and are now leaving the country for good, you can apply to the Australian Taxation Office (ATO) for early release of benefits. Also, if you: have funds in an Superannuation Holding Accounts Reserve (SHAR); and are experiencing severe financial hardship; then you may also be able to access your superannuation through the ATO. Contact the ATO on 13 10 20 or visit www.ato.gov.au/super Help from Centrelink If you have been receiving an eligible income support payment from Centrelink, you may be able to apply direct to your superannuation fund/rsa for early release. Contact Centrelink on 13 10 21 or visit www.centrelink.gov.au 4
Accessing your superannuation with APRA s help What the law allows As described on page 3, APRA can give approval for the early release of superannuation only under some very specific circumstances. These circumstances, called specified compassionate grounds, are set out in Australian law (Regulation 6.19A of the Superannuation Industry (Supervision) Regulations 1994). When you apply to APRA for permission to access your benefits, APRA s staff assess whether your situation fits within what s allowed by the law. This means that APRA staff generally cannot exercise any discretion or make special allowance for early release, whether they would personally like to or not. Grounds APRA can consider This section gives more detail about the specified compassionate grounds under which APRA can approve early release of benefits. 5 What s a dependant? Many of the specified compassionate grounds apply to you or a dependant of yours. Broadly speaking, your dependants are: your partner or spouse; your children (provided they are not living independently from you); and/or anyone else who is dependant on you for financial, domestic or personal support (e.g. an elderly parent who lives with you). This means that relatives are only dependants if they rely on you for financial, domestic or personal support.
Medical/dental treatment or transport To help pay for medical/dental treatment, or transport to medical/dental treatment, for you or your dependant. You/your dependant must need the treatment to: treat a life-threatening illness or injury; alleviate acute or chronic physical pain; and/or alleviate acute or chronic mental condition. Also, the treatment must not be readily available through the public health system and the cost of treatment not be completely covered by your (or your dependant s) private health insurance and/or Workers Compensation. Mortgage assistance To prevent your home from being sold by the lender with whom you have the home s mortgage. Note that this ground usually does not include rent, or making payment on a mortgage that: you expect to have difficulty paying for in the future (but are not yet in arrears); is in arrears, but not to the extent that the lender has decided to sell; a dependant, other family member or friend has; or is for a second or investment property. Modifications to your home and/or motor vehicle To pay for modifications required to accommodate special needs of a person with a severe disability (you or one of your dependants). Care for terminal medical condition To provide care for yourself or your dependant if they have a terminal medical condition. Note that this kind of care is often referred to as palliative care. 6
Death of a dependant To assist with funeral, burial, cremation and other expenses related to the death of a dependant. Note that the deceased person must have been a dependant of yours: it is not enough that they were a family member. Therefore, expenses associated with the death of a parent, grandparent or sibling will only be approved if that family member was reliant on you financially, domestically or personally. How to apply If you think that one or more of the above specified compassionate grounds applies to you, you need to complete the relevant APRA Early Release of Superannuation Benefits application form. There is a different form for each ground, so you need to fill out one form for each ground that you feel applies. If you are applying under more than one ground, you can complete the parts that are common to every form that is, Sections 1 to 4 just once. If you do this, make sure you submit all the forms together, so we don t miss any potentially relevant grounds for your application. You can download the form(s) that match your situation from APRA s website at www.apra.gov.au. Alternatively, call APRA on 1300 13 10 60 (from outside Australia, call +61 2 6123 5298) and we can post, fax or email the right form to you. Note that you must use APRA s application forms rather than writing a letter, etc to apply for early release of super under specified compassionate grounds. Need help? Like to talk to someone about early release of super? Have questions about this brochure? Want help filling out your application form? 7
Submitting your form To submit your application to APRA: complete all the appropriate questions on the application form(s); and collect the relevant supporting documentation (as described in the form(s)). Forms and supporting documentation can be submitted by postal mail, fax or email. Details are on the last page of every form. What happens next We will send you an acknowledgement letter within 5 working days (approximately a week) of receiving your application. We aim to have all applications assessed within 10 working days (approximately a fortnight). In busy times, it takes longer for applications to be assessed (e.g. up to 30 working days). The number of days shown above are from the time we receive all the information we need to assess your application. Assessments take longer if not all the necessary questions have been completed, or some of the required supporting documentation is missing. The outcome of your application When an assessor has made a decision about your application, they will write you a letter containing their decision and their reasons for that decision. Contact APRA on 1300 13 10 60 (+61 2 6123 5298 outside Australia) or email contactapra@apra.gov.au 8
About APRA The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry. APRA is funded largely by the industries that it supervises. It was established on 1 July 1998. APRA currently supervises institutions holding approximately $3.1 trillion in assets for 21 million Australian depositors, policyholders and superannuation fund members. Telephone 1300 13 10 60 (+61 2 6213 5298 outside Australia) Monday to Friday between 9am and 6pm Eastern. Fax 02 6213 5299 Email contactapra@apra.gov.au Website www.apra.gov.au Mail GPO Box 9836 CANBERRA ACT 2601