Accessing superannuation early – everything you need to know

More important details have emerged about accessing super from one of the nation’s largest super funds ahead of people applying to get their money.

Desperate Australians who will have to dip into their superannuation to make ends meet are being warned to carefully read the fine print before they do so.

It’s expected super fund members will be able to access their super from April 20 as the funds rush to implement the new systems to do it.

The nation’s largest superannuation fund AustralianSuper has started notifying its huge database of more than two million members about the issues of doing it.

The fund said they have increased their member services teams to cope with the unprecedented demand from Australians concerned about their super and also those requesting to access it prematurely.

In AustralianSuper memo to members it stated the following:

• Members impacted by coronavirus (COVID-19) can make withdrawals of up to $10,000 from their super account up until 30 June 2020.

• They can make withdrawals up to $10,000 from 1 July 2020 for approximately three months.

But it also said members wanting to access $10,000 this financial year must do by June 19 to ensure they get it in time before the June 30 cut-off date.

Treasurer Josh Frydenberg called superannuation the “people’s money” and said they should be able to access it within weeks.

Members have been warned by the fund of the following issues if they do tap into their retirement savings early the follow issues could occur:

• If you withdraw your entire retirement balance your account will be closed and any insurance will have to end.

• If you want to keep your insurance cover you’ll need to have enough money in your super account to pay for it.

• Once you have completed your application and provided proof of identity it usually takes around five business days to process your early access request.

Applications to access super early should be available by April 20 and they can be done by visiting my.gov.au.

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Treasurer Josh Frydenberg has previously said the $3 trillion super system was the “people’s money” and they would be able to access it in times of crisis.

Eligible Australians can access $10,000 tax-free this financial year and $10,000 tax-free next financial year.

The criteria to be able to do this includes being unemployed, you are eligible to receive a jobseeker payment, youth allowance for jobseekers, parenting payment or special benefit or farm household allowance or were made redundant or had your working hours reduced by 20 per cent of more after January 1 this year.

Sole traders can also apply whose business was suspended or their turnover fell by 20 per cent or more.

@sophieelsworth

Originally published as Accessing superannuation early – everything you need to know