At North, we recognise that life can sometimes take an unexpected turn that may put our clients and members in a vulnerable position. When this happens, we’re here to support and have processes in place to make things a little easier.
Accessing your super early
While you generally can’t access your super until retirement, there are some specific circumstances where the law allows you to draw on your super early.
These conditions can be summarised as:
- Compassionate grounds
- Terminal medical condition
- Permanent incapacity
- Severe financial hardship
Before applying to access your super under early release provisions, you should consider:
- consulting your financial adviser and/or Centrelink to confirm whether the payment will have any social security implications
- checking the balance of your super before applying for early access
- the implications on any insurance inside your super (an adviser can help with this).
Compassionate grounds
You may be able to access your superannuation benefits on compassionate grounds where you don’t have the financial capacity to meet certain expenses, including:
- medical treatment for you or a dependant
- modifications to your home or transport, or disability aids required because of a severe disability suffered by you or a dependant
- mortgage payments or assistance to prevent the forced sale of your residential home
- palliative care expenses for yourself or a dependant, or
- expenses associated with the death, funeral or burial of a dependant.
Applications for early release of super need to be made to the Australian Taxation Office (ATO) – visit ato.gov.au for more information. Before making an application, you should confirm that your super fund is able to make payments approved under compassionate grounds.
Terminal medical condition
You may be able to access your super if you’re suffering from a terminal medical condition. You’ll be viewed as suffering a terminal medical condition if two registered medical practitioners certify (jointly or separately) that you suffer from an illness or injury that is likely to result in your death within 24 months. At least one of these medical practitioners must specialise in a field related to your illness or injury.
If you satisfy this condition of release, you can access the balance of your superannuation account at this time as well as any further benefits accrued within a period of 24 months.
Lump-sum payments released under this condition are tax-free.
Permanent incapacity
You may be able to access your super if you become permanently incapacitated.
You should check with your super fund to confirm what evidence is needed to satisfy this condition of release, as processes vary between funds. Generally, one or two registered medical practitioners will need to certify that due to your ill-health (physical or mental) you’re unlikely to engage in gainful employment for which you are reasonably qualified by education, training or experience.
If you satisfy this condition of release, you can withdraw all or part of your super as a lump-sum payment or use it to commence a superannuation income stream.
Severe financial hardship
You may be able to access your super if you’re having difficulty meeting reasonable and immediate family living expenses and you're receiving Commonwealth income support payments.
If you’re under preservation age, you must have received Commonwealth income support payments for a continuous period of 26 weeks and be receiving these payments at the time of application. You’ll need a letter from Services Australia confirming this.
You’ll need to satisfy your super fund that you’re unable to meet reasonable and immediate family living expenses – ask your fund to confirm what’s needed to verify this.
You’re only able to receive one payment in any consecutive 12-month period.
The minimum payment before tax is $1,000 (or the balance of your super if you have less than $1,000) and the maximum payment is $10,000.
If you have reached your preservation age plus 39 weeks, you must have received Commonwealth income support for a cumulative period of 39 weeks since reaching preservation age and not be gainfully employed on a full or part-time basis at the time of application.
You’ll need a letter from Services Australia confirming receipt of income support, and there’s no limit on the amount that can be released.
Taxation
The tax treatment applying to payments from your super under early release provisions depend on the payment type, your age and the tax components of your payment. We’ve included some general information below, but it’s important you discuss your circumstances with your financial adviser or tax adviser.
If you’re age 60 or over, withdrawals from your account are generally tax free.
If you’re under age 60, your payment will generally be taxed as shown in the table below.
| Age | Taxable component (taxed element) | Tax-free component | ||||
| Under preservation age | 20% plus Medicare Levy | Nil | ||||
| Preservation age to age 59 | Amount up to the low-rate cap* | Nil | ||||
| Amount above the low-rate cap* | 15% plus Medicare Levy | Nil |
*$230,000 for 2022/23 and $235,000 for 2023/24. This amount is indexed to Average Weekly Ordinary Time Earnings (AWOTE) and rounded down to the nearest $5,000 each year. For current cap information, refer to https://www.ato.gov.au/.
If you’re under age 60 and we don’t hold a valid TFN for you, we’re required to deduct tax on the taxable component of a lump-sum benefit paid to you at the highest marginal tax rate plus the Medicare levy.
If you receive a payment from your super because you’re suffering from a terminal medical condition, no tax is payable.
If you receive a lump-sum payment from your super because you’re permanently incapacitated, the tax-free component may be increased in accordance with tax law, reducing the overall tax you are required to pay.
For more information about the tax treatment of payments from super refer to ato.gov.au.
Your insurance
Before applying to access your super under early release provisions, it’s important to consider any insurance you may have inside super.
If your super account has insurance attached to it, this insurance will remain in place (subject to your insurance terms) unless:
- your super account is closed as a result of your withdrawal (in which case your insurance cover will stop on the date your account is closed)
- after your withdrawal, your super account balance isn’t enough to cover the cost of your insurance premiums on their due date (in this case your insurance cover will lapse and your insurance will be cancelled unless additional contributions are made into your super)
- your super account becomes inactive (no contributions or rollovers received into the account) for 16 months, unless you’ve previously requested to keep your insurance even if your account becomes inactive.
If the insurance cover attached to your super account lapses or is cancelled, you’ll have to speak to your insurer to discuss any potential options of reinstatement. The insurance providers available on North can be contacted below. Please note, North is not an insurer and all insurers are external to North and AMP:
- Elevate/Resolution Life - 133 731
- Group Insurance – 1800 667 841
- TAL – 1300 209 088
- AIA – 1800 333 613
We're here to help
North Service Centre
Monday to Friday
8:30 am - 7.00pm (Sydney time)
Important information
The information on this page has been provided by NMMT Limited ABN 42 058 835 573, AFSL 234653 (NMMT). It contains general advice only, does not take account of your personal objectives, financial situation or needs, and you should consider whether this information is appropriate for you before making any decisions. It’s important you consider your circumstances and read the relevant product disclosure statement and target market determination, available from northonline.com.au or by contacting the North Service Centre on 1800 667 841, before deciding what’s right for you.
You can read the Financial Services Guide online for more information, including the fees and benefits that companies related to NMMT, N.M. Superannuation Proprietary Limited ABN 31 008 428 322, AFSL 234654 (N.M. Super) and their representatives may receive in relation to products and services provided.
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All information on this website is subject to change without notice.
Information is current as of June 2024.