While super is designed to help people save for retirement, the Government recognises that for those significantly financially affected by the coronavirus, accessing some of their super today may outweigh the benefits of maintaining those savings until retirement.
The Government proposes to enable eligible individuals to apply online through myGov to access up to $10,000 of their super before 1 July 2020, and also access up to a further $10,000 from 1 July 2020 for a limited period (proposed to be approximately three months depending on the passage of relevant legislation).
Eligibility will be managed by the ATO, with applications made directly though the myGov website. To apply for early release you must satisfy any one or more of the following requirements:
People accessing their super will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments. For more information, refer to the Government’s Early access to superannuation fact sheet.
It is proposed that this change will commence mid-April 2020 which will require a change to enabling regulations as well as super funds’ systems and processes.
If you are think you might be eligible and will apply for this early release of your super it is important to know that we will require appropriate proof of identity documentation to enable any payments from your super.
In a similar move that was implemented following the Global Financial Crisis, the Government is proposing changes to reduce the minimum draw down rates, reducing the need for retirees to sell down investment assets, enabling them to better manage the impact of the current volatility in financial markets. The Government also announced a reduction to the upper and lower social security deeming rates.
In summary, the Government proposals are to:
For more information, refer to the Government’s Providing support for retirees fact sheet.
We understand that the coronavirus outbreak has created a period of uncertainty and you may be nervous about the impact this may be having on your super. We exist solely to look after you as part of our membership community. If you’re not sure whether you should be acting on some of these temporary changes or what it might mean to your future retirement, then contact us.