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Are you thinking of accessing super early?

Super 28 April, 2020
Blog_early access

Early access update 

27 July 2020

The Federal Government has announced an extension to the early access superannuation scheme.
 
Eligible Australians will be able to apply for up $10,000 of their superannuation until 31 December 2020. The original cut-off date was 24 September 2020.
 
Additional information can be found via the government’s latest fact sheet.

Applications for early access can be made via the My.Gov website.

Accessing your super early

The Federal Government recently introduced a new condition which allows for early release of super for people who have been financially affected by the coronavirus. Under this condition, you can receive a payment of up to $10,000 from your super in the current, 2019-20 financial year* and a further payment of up to $10,000 in the 2020-21 financial year*.

However, although these measures can offer financial relief now, there are some things you should consider before deciding if it is right for you.

If you access super early, what does it mean in retirement?

If you access $10,000 of your super

If you intend to retire at 65 years old, and you access $10,000 of your super today, below are some estimates of how much less you might have when you retire.

Age

Retirement balance could be reduced by this amount

25

$26,500

30

$23,000

35

$20,100

40

$17,600

45

$15,200

50

$11,300

Estimates are shown in today’s dollars, discounted using a wage inflation rate of 3.5% p.a. Other assumptions are: Starting account balance of $20,000. Starting salary of $70,000 which increases in line with wage inflation. Contributions are made at the Superannuation Guarantee rate (currently 9.5% of salary and allowing for legislated increases to 12%). Investment returns after tax and before fees are assumed based on lifecycle option of 6.4% p.a. to age 50, 6.0% age 50-54, 5.4% age 55-60 and 5.0% age 61-65. Percentage-based fees of 1.3% p.a. to age 50, 1.2% p.a. age 50-59 and 1.1% p.a. age 60-65.  Investment tax of 1.3% to age 50, 1.2% age 50-59 and 1.1% age 60-64.  Combined insurance premiums and dollar-based administration fees are $150 p.a. and this amount increases in line with wage inflation.

Will my insurance cover through super be affected?

Please refer to the update at the top of the page

It depends on how much super remains in your account after you have accessed your super. You need to have enough in your super to cover your insurance costs and other fees.

If you withdraw all of your super, any insurance cover you may hold could be cancelled. If it is cancelled and you would like to apply for cover again in the future you can, but it means you will need to answer health questions and you’ll be subject to approval by the Insurer.

*Applications for a 2019-20 payment must be made by 30 June 2020 and applications for a 2020-21 payment must be made after 30 June 2020 but no later than 24 September 2020.

Should I apply for early access?

As a Catholic Super member, if you meet the eligibility criteria, you can apply to access your super early. This may be helpful for people under extreme financial stress and those who have no other assets or sources of income to draw on.

However, before you apply for early access to your super, you should be aware that a withdrawal now could have quite an adverse impact on the amount you’ll have in your super when you retire. This will primarily be determined by your age, and the number of years you are expected to have remaining in your working life.

Review your super balance

If you would like to review your current super balance, you can access it in the following ways:

  • Visit our online portal at csf.com.au/mylife-online and enter your member number and PIN, or
  • Contact us on 1300 655 002 between 8:30 am and 6:00 pm EST/EDT Monday to Friday, or email info@csf.com.au

Consider financial advice

Before making a final decision about accessing your super early, we recommend you seek sound financial advice. Consider booking an appointment with one of our financial planners.

Learn more

Additional early release information and FAQs

For more information about early access to super due to COVID-19, refer to the ATO website page and the Treasury fact sheet. You can also contact the Australian Taxation Office on 13 10 20 and read updated Q&As from the ATO. Additional information on how the ATO assess your application is available here. 

If you have questions about your super or would like to book a financial advice appointment, contact us on 1300 655 002 between 8:30 am and 6:00 pm EST/EDT Monday to Friday or email info@csf.com.au

What is the COVID-19 early release program?

The Federal Government recently introduced a new condition which gives you early access to some of your super if you have been financially affected by the coronavirus.

Under this condition, eligible citizens and permanent residents of Australia or New Zealand can apply to receive a payment of up to $10,000 from your super in the current, 2019-20 financial year* and a further payment of up to $10,000 in the 2020-21 financial year*. These payments are tax-free.

Eligible temporary residents can apply for a payment of up to $10,000 from your super in the current, 2019-20 financial year*. These payments are tax-free.

*Applications for a 2019-20 payment must be made by 30 June 2020 and applications for a 2020-21 payment must be made after 30 June 2020 but no later than 25 September 2020.

Am I eligible for early release under the COVID 19 rules?

You must meet at least one of the following conditions to qualify for an early access payment from your super:

  • you are unemployed; or
  • you are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment, special benefit or farm household allowance
  • on or after 1 January 2020:

(a) you were made redundant; or

(b) your working hours were reduced by 20% or more; or

(c) if you are a sole trader, your business was suspended or there was a reduction in your turnover of 20% or more.

If you’re a temporary resident you must meet at least one of the following conditions to qualify for an early access payment from your super:

  • You hold a student visa that you have held for 12 months or more and you are unable to meet immediate living expenses.
  • You are a temporary skilled work visa holder and still employed but unable to meet immediate living expenses.
  • You are a temporary resident visa holder (excluding student or skilled worker visas) and you cannot meet immediate living expenses.

How do I apply

Applications can only be made via the ATO through the MyGov website.

Before you start the application process, you should:

  • set up your myGov account and link it to the ATO
  • have your Australian bank account information available – you will need this to complete your application and only Australian bank accounts are accepted
  • check your super balance – your actual account balance may be higher or lower than that shown in ATO Online or in the early release application form.

How long before I receive my payment?

Most payments will be made in 5 business days after we have been notified that your application has been approved by the ATO. 

It may take longer than 5 business days from the date of your application for the payment to reach your bank account.  This is because:

  • it may take 1-2 business days for us to be notified by the ATO. 
  • we may take up to 5 business days to process your payment. 
  • once payment is made, it may take a further 1-2 business days for the EFT to reach your account.

Once your application is approved by the ATO, you do not need to contact us for your payment to be made. 

 

Early access timeline

Timeline infographic supplied via APRA.  

Where do I go for help with the process?

You will need to contact the ATO.  Unfortunately, you are not able to apply through your super fund.

Authorised by Togethr Trustees Pty Ltd (ABN 64 006 964 049; AFSL 246383), the trustee of MyLifeMyMoney Superannuation Fund (ABN 50 237 896 957; SPIN CSF0100AU). Catholic Super and MyLife MySuper are divisions of MyLifeMyMoney Superannuation Fund. Financial advice services may be provided to members by the trustee's related entity. 

Togethr Financial Planning Pty Ltd (ABN 84 124 491 078; AFSL 455010). The information contained herein is general information only. It has been prepared without taking into account your personal investment objectives, financial situation, or needs. It is not intended to be, and should not be, construed in any way as investment, legal or financial advice. Please consider your personal position, objectives, and requirements before taking any action.

© 2020 Togethr Trustees Pty Ltd. For further information please our contact our Service Centre on 1300 655 002 or visit our website: csf.com.au.