On 23 March 2020, the Government legislated a $66bn stimulus package, which included early access to superannuation to support those in financial stress.

A summary of the new measure

The Government is allowing eligible superannuation members to access up to $10,000 from their super this financial year (2019-2020) and up to $10,000 in the next financial year (2020-2021). Any super that is released early will not be taxed and will not affect Centrelink or Veterans’ Affairs payments.

While we understand the Government’s financial hardship measures, we want you to be fully informed before you make a decision about accessing super early. There could be some unintended consequences for your super retirement balance and your insurance. 

Accessing super early

Frequently asked questions

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The application for early release of super as a result of COVID-19 is made through
my.gov.au. For more information, and to find out if you’re eligible to apply, please read the government fact sheet.

This is not the same measure as accessing your super early as a result of severe financial hardship.

I’m thinking of accessing my super early. What should I consider?

If you’re thinking about withdrawing your superannuation, there are several important things you need to consider before you decide to access super early.

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  1. Your insurance may be cancelled.
  2. Early release of your super could have unintended consequences for your insurance. For example, if you withdraw your full super balance, or do not leave enough funds to pay your premiums, you could have your insurance cancelled. If your insurance is cancelled and you want to reapply for cover, you will have to complete an Application for insurance form. Your application must contain information about your health, income, occupation and lifestyle. Depending on the information supplied, your application may be accepted or declined by the insurer. 

    For more information about your insurance in super refer to the relevant insurance Member Booklet.

  3. Make sure you have enough funds in your super account.

    The MyGov website will provide you with your account balance as at 30 June 2019. The easiest way to check your current balance and insurance is with us. You can go online and log in to your account or check through our mobile app.

    This is a good time to also check that your personal details are correct and up to date.

    For more information on how to check you balance, visit our Frequently Asked Questions.

     

  4. You'll have significantly less in retirement.

    Withdrawing $10,000 or $20,000 now also means you will miss out on the opportunity to earn investment earnings on this money. While it might not seem like you’re withdrawing much now, it can make a big difference to your super balance when you retire. This is because investment earnings are reinvested to make further investments earnings, compounding overtime. 

    Our modelling shows that members who withdraw $20,000 from their super now, could be anywhere between $28,000 and $70,000 worse off in retirement in today’s dollars (that is, after accounting for the impact of inflation overtime) depending on their age. Refer to the graphs below which show the difference in super balance at retirement if you withdraw $10K or $20K now.


    *These projections are estimates and not guaranteed. The actual money you get in your retirement may be very different from the estimates. The estimate does not consider any other superannuation accounts that you may hold or other assets that you own.

  5. We’re here to help

    Most of all, we suggest that members considering accessing their super early seek advice to ensure that they have exhausted all other options available to them. For example, the Government has introduced a job keeper subsidy, which is a $130 billion economic package aimed at preserving jobs. Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum of 6 months.

    For more information, read the Government fact sheet.

    While our contact centres and advice teams are experiencing longer than usual wait times, we are here to provide our members with the best advice and guidance to help them to respond to the current uncertainty while remaining focused on their long-term retirement outcome.

    For more information on how we’re here to support you during this time, read our article, Supporting our members.