Australians have been given the green light to access super early amid the coronavirus pandemic

Australians can now access up to $10,000 of their retirement savings this financial year to cope during the coronavirus crisis. Here’s what you need to do.

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Struggling Australians have been given the green light to access their superannuation early to provide them a much-needed cash injection during the COVID-19 crisis.

Treasurer Josh Frydenberg today announced from next month people can tap into their retirement savings early – as part of a series of measures rolled out by the Federal Government amid the coronavirus pandemic.

He said the $3 trillion super system was “the people’s money” and they would be able to access it during this time of crisis.

It is estimated as much as $27 billion will go back into the pockets of Australians – the equivalent of 1.3 million Australians.

From mid April individuals affected by COVID-19 will be able to access up to $10,000 of their super this financial year.

Treasurer Josh Frydenberg speaks to the media during the press conference at Parliament House in Canberra. Picture: AAP

They will then be able to access a further $10,000 of their super savings in the 2020-21 financial year.

For applicants to be successful they must satisfy any one of the following requirements:

• Be unemployed.

• Be eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment or special benefit or farm household allowance.

• After January 1 this year were made redundant or had your working hours reduced by 20 per cent or more. If you’re a sole trader and your business was suspended or your turnover fell by 20 per cent of more you can apply.

The money released will be tax free and all payments will be managed by the Australian Taxation Office.

The stock market collapse has savaged many Australians’ superannuation. Picture: Getty

Once the measures are available applicants can apply though my.gov.au.

The Association of Superannuation Funds of Australia’s chief executive officer Dr Martin Fahy said “accessing super should only be done under extenuating circumstances” and to “think carefully”

“The government has indicated that this measure will be implemented from mid April and members should refrain from contacting funds on this issue until we have more information,” Dr Fahy said.

He said members should wait before applying because the changes needed to be legislated first.

Westpac acting chief executive officer Peter King said they would support the early access to super to help those in need.

“This scheme will have minimal impact on superannuation in the medium to long term and will provide much needed support for many Australians during these unprecedented times,” he said.

Financial Services Council’s chairman Geoff Lloyd said the announcement was a good option for those in financial distress.

“This is a sensible package of temporary measures which recognises super is people’s money, it’s the savings of working Australians,” he said.

“In extreme times like this when people unexpectedly face financial hardship, it can and should be used.

“We expect less than 1 per cent of the nation’s superannuation savings pool to be affected.”

He asked Australians to be patient while the details were being finalised and processes were being put in place.

The Australian Institute of Superannuation Trustees’ chief executive officer Eva Scheerlinck urged people to only access super as a last resort.

The Australian Institute of Superannuation Trustees chief executive officer Eva Scheerlinck said super should only be accessed as a last resort.

“Australians who are facing financial hardship to access all other sources of income measures before tapping into their super,” he said.

Under existing rules Australians can already access super under hardship arrangements including compassionate grounds, financial hardship, medical conditions or temporary incapacity.

AustralianSuper’s chief executive officer Ian Silk said they had begun working on developing all the necessary steps to implement the Federal Government’s new measures.

“The efficient running of the overall superannuation sector – in the interest of superannuation fund members – will need to be closely considered as the plan is rolled out and timing and processes confirmed,” he said.

Rules around retirees and their super will also change.

Currently retirees are required to draw down minimum of 4 per cent a year on super.

The government has halved the requirement to 2 per cent to give them more control of their assets.

ACCESSING SUPER EARLY

• Can to be accessed from mid-April.

• Rules need to be implemented first before Australians can apply.

• Applicants must be unemployed or made redundant after January 1 or had their working hours reduced by 20 per cent or more.

• Sole-trader applicants must have had their business suspended or had a reduction in turnover by 20 per cent or more.

• No tax is to be paid on early-release amounts.

• Eligible Australians can access $10,000 this financial year and $10,000 next financial year.

• Applications can be done through the my.gov.au website.

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Originally published as Australians have been given the green light to access super early amid the coronavirus pandemic