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Early release of superannuation
Has anyone done it?


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21 replies to this topic

#1 zenbaba

Posted 25 January 2012 - 06:57 PM

Hi all,

After recently separating from my husband, I'm up to my eyeballs in debt and am thinking of perhaps pursuing the early release of my superannuation. I'm interested to see if anyone has done this. Was it difficult?

#2 annamosas

Posted 25 January 2012 - 08:22 PM

Hi there,
I thought about doing this after separating from my husband to buy a van to drive in with my daughter who has a disability. First step would be to find out if your super fund allows this. I found out pretty quick that my fund doesn't allow it at all despite the circumstances. I would have had to have the law changed regarding my super fund for it to happen. Secondly, bear in mind that anything you withdraw is considered part of your income for the year and then effects any centrelink or family tax benefits your may receive.
I am sorry you are in this situation. I feel your pain.

#3 Pearson

Posted 25 January 2012 - 08:40 PM

It was a lot easier before the 2008 GFC, but so many people lost so much money then, it is hard now, and with the current economic outlook, I'd say would be pretty hard.

Also, if you have only put in the standard 9%, I think it is hard too.

But, it is a scary thing, dependent on how much you have there, and your age.  How much are you looking at using of it?  All of it?  How are you going to fund your retirement?  Did you get allocated any of your X's super in your property settlement (you can do this, I dont necessarily agree with it, but it can be done)? If this is done, will you put in extra contributions?  The one way to build your super up again is to do this, and take a risk at high yield investments.

I would talk to a financial planner, or counsellor first.

#4 namie

Posted 25 January 2012 - 08:47 PM

I tried last year when we went through a super tight patch where I really didn't think we'd come through the other side with a house (renting), or anything at all actually, but my super company wouldn't release anything. The government has a law in place that prevents it and there are only a few clauses that can bypass it, none of which applied to me (and it doesn't sound like they'd apply to you either) and couldn't be waivered at all.

Check with your super company, they should have the info on their website, or can provide it to you, but don't hold out much hope.

#5 MintyBiscuit

Posted 25 January 2012 - 08:49 PM

You're only allowed to withdraw super early in very specific circumstances - severe financial hardship backed up by six months on specific centrelink benefits, threat of foreclosure on a mortgage or severe disability/terminal illness situations.
If you contact your super fund they'll be able to tell you pretty quickly if you're eligible, but pretty much if you're working and the debts you're referring to aren't mortgage, you won't be able to withdraw it

ETA - As a PP mentioned, these rules are government legislation, not super fund rules

Edited for spelling

Edited by Holly-Meow 84, 25 January 2012 - 09:18 PM.


#6 Chasing daisies

Posted 25 January 2012 - 08:52 PM

Yes you have to be getting a c/l payment for 6 months or longer to be eligible for hardship

#7 pinkpeony

Posted 25 January 2012 - 08:53 PM

It is very difficult to do. Could you look at a loan through CL and it comes out of your payments via a reduced rate.

Hopefully it is just a blip for you and things will turn around soon.

#8 zenbaba

Posted 25 January 2012 - 08:55 PM

Thanks. I'm 32 and was hoping to get out about $10,000 mainly to pay credit card debt. We've only been separated for a short time and haven't done any settlement of property etc.

#9 Lainskii

Posted 25 January 2012 - 08:58 PM

They'll also only release money for your mortgage if you have been threatened with foreclosure so you can't just say money is tight, you have to prove that they are going to take your house.


Here is a link that explains it.

http://www.centrelink.gov.au/internet/inte...erannuation.htm

Financial Hardship - you need to have been receiving specific centrelink benefits for 6 months (need to get a Q230 form from Centrelink to prove this to your super fund) and if you have been getting benefits then contact your super fund for the forms. You essentially need to prove that your expenditure is greater than your income with proof, so they will ask for bills etc. It is up to the super fund to release benefits, so they make the decision based on the form you complete. The most you can get in one financial year is $10000 and this is taxed and also treated as income for tax purposes.

Compassionate Grounds - in specific circumstances the DHS can release benefits, generally for major illness (to convert houses, cover expenses etc), mortgage foreclosure etc. The link above includes a link on how to apply for compassionate grounds. DHS can determine how much money you require based on your circumstances.






#10 Goggie

Posted 25 January 2012 - 08:59 PM

Book into see a financial adviser, they know the super legislation backwards and can help you work out a plan for yourself for to survive on your own. Best of luck x

#11 pinkpeony

Posted 25 January 2012 - 09:04 PM

Can you transfer some or all of it to an interest free or low interest until the finances are sorted out? Or even a personal loan would be better.

#12 pinkpeony

Posted 25 January 2012 - 09:13 PM

Having worked in the trustee area of a super fund it is very hard to get money out. We have rejected people on terminal illness because their Dr's have said they have more than 6 months to live and this was preGFC.

#13 rainbow*babe

Posted 25 January 2012 - 09:25 PM

There are a couple of ways that you might be able to access your funds:

Severe Financial Hardship.
- You will need to have been in receipt of centrelink benefit for a minimum of 26 continuous weeks (and supply a Q230 letter from C/L to confirm this). This is legislation, so your fund won't even look at you unless you meet this criteria.
- You will need to supply a 'Centrelink Income Statement' as proof of your payment amount
-You will need to complete your funds Benefit Payment Application and/or Financial Hardship Declaration form. The declaration form lists all of your expenses (rent/mortgage/food etc) as well as your debts.
- You will need to supply evidence of your debts (ie provide copies of overdue bills) for most funds, these will need to be no more than 3 months old. So if its an older debt, you will need to get an updated bill.
- Certified Proof of Identity (CPOI) usually required for payments over 1k
- You can only apply under Severe Financial Hardship once in any 12 months period for a maximum of 10k before tax.

Probably best to contact your super fund for their requirements as they can differ slightly between funds (for example, I know some funds will accept an infringement notice as a debt, but others wont)


Compassionate Grounds
You may be eligible for early release of superannuation benefits on compassionate grounds if you need money to:
- pay for transport for medical treatment for you or your dependant
- prevent forclosure on your home
-
modify your home or vehicle to accommodate a severe disability for you or your dependant
-
pay for expenses associated with palliative care for a terminal illness for you or your dependant
-
pay for expenses associated with your dependant’s death, funeral or burial.
Your super fund can advise if you may be eligible, but you can contact the Department of Human Services (DHS) for more info, and to apply. They will send a letter confirming your eligibily and payment instructions to your super fund, who will pay the benefit accordingly. The number for DHS is 1300 131 060.
I hope this helps OP, good luck x


#14 tasy

Posted 25 January 2012 - 09:35 PM



i was in the same situation and had been on cl for a few years and they wouldn't let me take any out

#15 *Lib*

Posted 25 January 2012 - 09:38 PM

Yet people can get funds released for weight loss surgery..... huh.gif You apply through APRA, not sure if its the same for hardship..... I hope you can see the end of the tunnel soon.....can you refinance the creditcard into a personal loan? Might make the repayments more manageable?

#16 Lightning_bug

Posted 25 January 2012 - 09:43 PM

QUOTE (rainbow*babe @ 25/01/2012, 10:25 PM) <{POST_SNAPBACK}>
There are a couple of ways that you might be able to access your funds:

Severe Financial Hardship.
- You will need to have been in receipt of centrelink benefit for a minimum of 26 continuous weeks (and supply a Q230 letter from C/L to confirm this). This is legislation, so your fund won't even look at you unless you meet this criteria.
- You will need to supply a 'Centrelink Income Statement' as proof of your payment amount
-You will need to complete your funds Benefit Payment Application and/or Financial Hardship Declaration form. The declaration form lists all of your expenses (rent/mortgage/food etc) as well as your debts.
- You will need to supply evidence of your debts (ie provide copies of overdue bills) for most funds, these will need to be no more than 3 months old. So if its an older debt, you will need to get an updated bill.
- Certified Proof of Identity (CPOI) usually required for payments over 1k
- You can only apply under Severe Financial Hardship once in any 12 months period for a maximum of 10k before tax.

Probably best to contact your super fund for their requirements as they can differ slightly between funds (for example, I know some funds will accept an infringement notice as a debt, but others wont)

Compassionate Grounds
You may be eligible for early release of superannuation benefits on compassionate grounds if you need money to:
- pay for transport for medical treatment for you or your dependant
- prevent forclosure on your home
-
modify your home or vehicle to accommodate a severe disability for you or your dependant
-
pay for expenses associated with palliative care for a terminal illness for you or your dependant
-
pay for expenses associated with your dependant’s death, funeral or burial.
Your super fund can advise if you may be eligible, but you can contact the Department of Human Services (DHS) for more info, and to apply. They will send a letter confirming your eligibily and payment instructions to your super fund, who will pay the benefit accordingly. The number for DHS is 1300 131 060.
I hope this helps OP, good luck x



These are the two ways.  Superannuation funds have to offer one of these options but not both.  So you have to check with your fund what the grounds are for early release.  If they don't offer the one for your situation then you can change funds to find one which will (although enquire about their 'waiting periods' because some do have them).

As for having it released for weight loss surgery - if it's a life-saving operation then yes, super can be released.  As it can for transport, including a car, for transporting the disabled to therapy.

It's never easy but the law's designed to make it hard.  OP.  If you can find an alternative then find it.  You are going to need your super.

#17 *Pebs*

Posted 26 January 2012 - 09:29 AM

I did. About 6 years ago. To pay out my credit card.

I found the process easy.. too easy in fact. I can't remember all the ins and outs, but at the time I was receiving centrelink payments and had been for 6 months.

I was with club plus as my super fund.

#18 Pearson

Posted 26 January 2012 - 02:04 PM

I would talk to a financial counsellor, they can look at all your finances, and advise you on budgeting and the best way to pay off the debt.

I read your other thread where your DH wants you to pay rent to him, but, I would not agree to this without legal advice, and have it drawn up in a contract.  CL will probably not pay you rent assistance on this amount either, you would have to have that figured out as well.  But, the thing for him, is it would mean that he would have to declare this as income as well.

Have you applied for all your CL benefits - Single parent, Family tax benefit  and also your child care percentages will now change.  Also go here and find out how much child support he should be paying you.

Getting all your money ducks in a row will make it easy for you to get your finances in order.  Also, is the CC in your name?

#19 Cat©

Posted 26 January 2012 - 02:13 PM

We did it a few months ago under compassionate grounds, with three supporting letters from paeds x 2 and an OT, plus other letters from other specialists supporting our son.

We had no issues and it was decent amount, however, it was solely for a wheelchair compatible car to carry our new carers for the boys in also ( 9 seater).

Even then they didnt give us enough, as we asked for enough to cover mods to the car, but they only gave us enough to buy the car......still at least we can now all go out together!

I think it really depends on your personal circumstances and how much evidence you can provide. Cant hurt to try I guess.

#20 Spa Gonk

Posted 26 January 2012 - 03:29 PM

I believe APRA have really tightened things up at present and it is quite hard to get an early release.

I just wanted to mention though, check what rate it is taxed at, as well as how it affects your other payments.  I knew someone once who wanted to access it early, but lost a third of what she thought she would be getting in tax.  Let alone affecting FTB.  Not sure if this has changed or not, but the $10K you think you are getting might not neccessarily be that.

#21 StudyMum

Posted 26 January 2012 - 03:38 PM

I did back in 2008 (just before the GFC so I guess I got lucky) but I had to prove that I had been on CL benefits for at least 6 months and that my outgoings were greater than what I had coming in. I also had to provide statements/invoices etc of exactly what was going to be paid off and they provided me with enough out of my super to cover only those expenses.  Check with a financial adviser before doing anything and be aware of the taxes etc that you will have to pay.

#22 UpsyDaisy

Posted 27 January 2012 - 10:06 AM

Yes. We did. Last year.

We applied directly through my Super Fund - Severe Financial Hardship. We we're approved the release of the max. amount 10K - very quickly and it was in my account 3 days after they received my application and supporting documents.




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