4.20/58 Highland Way, Upper Coomera QLD 4209
Most people associate withdrawing superannuation with retirement. 2020 saw a federal government initiative allowing 2 x $10,000 withdrawals either side of June 30. If you missed out there is still a chance to withdraw. Here is an overview of how you may qualify for early release.
The ATO has preservation rules in place to ensure your super is kept safe until retirement. These preservation rules are as follows:
- Anything contributed after June 30, 1999 will require a condition of release approval
- Contributions from 1 July 1983 to June 30,1999 require the same conditions
What is a condition of release?
Think of them as circumstances where the ATO may grant an early release of your superannuation. It may be as a lump sum, a portion of your super or even staggered payments throughout an agreed upon duration (these are known as cashing restrictions).
What are these special conditions?
- compassionate grounds
- medical treatment and medical transport for you or your dependant
- palliative care for you or your dependant
- making a payment on a home loan or council rates so you don’t lose your home
- accommodating a disability for you or your dependant
- expenses associated with the death, funeral or burial of your dependant.
- severe financial hardships
You may be able to withdraw some of your super if you meet BOTH these conditions:
- You have received eligible government income support payments continuously for 26 weeks.
- You are not able to meet reasonable and immediate family living expenses.
The minimum amount that can be withdrawn is $1,000 and the maximum amount is $10,000 and you can only make one withdrawal in any 12-month period.
If your super provider requests evidence, contact the Services Australia to ask them to provide a letter confirming you have received eligible government income support payments continuously for 26 weeks or more.
- terminal medical condition
A terminal medical condition exists if ALL these conditions are met:
- Two registered medical practitioners have certified, jointly or separately, that you suffer from an illness or injury that is likely to result in death within 24 months of the date of signing the certificate.
- At least one of the registered medical practitioners is a specialist practising in an area related to your illness or injury.
- The 24-month certification period has not ended.
Your fund must pay your super as a lump sum. The payment is tax-free if you withdraw it within 24 months of certification.
If your fund does not allow access due to a terminal medical condition, you may be able to move your super to a different fund.
- temporary incapacity
You may be able to access your super if you are temporarily unable to work, or need to work less hours, because of a physical or mental medical condition.
This condition of release is generally used to access insurance benefits linked to your super account.
You will receive the super in regular payments over the time you are unable to work. A super withdrawal due to temporary incapacity is taxed as a super income stream.
Contact your super provider to request access to your super due to temporary incapacity and to ask about insurance implications attached to your account.
There are no special tax rates for a super withdrawal due to temporary incapacity.
- permanent incapacity
You may be able to access your super if you are permanently incapacitated. This type of super withdrawal is sometimes called a ‘disability super benefit’.
Your fund must be satisfied that you have a permanent physical or mental medical condition that is likely to stop you from ever working again in a job you were qualified to do by education, training or experience.
You can receive the super as either a lump sum or as regular payments (income stream).
A super withdrawal due to permanent incapacity is subject to different tax components. For you to receive concessional tax treatment, your permanent incapacity must be certified by at least two medical practitioners.
- super less than $200
You may be eligible to collect if:
- Your employment is terminated and the balance of your super account is less than $200
- You have found a ‘lost super’ account with a balance less than $200.
If you are experiencing any issues or have any questions, reach out and contact our team at Gold Coast Tax.