Getting super before your preservation age
Sometimes when you are in financial trouble it might seem like a solution to access your super, but depending on your situation, this may not be the best way to help you out of financial trouble. Other options include:
Be cautious if a broker or your lender suggests accessing your super as a first step. It may save your bacon in the short term or it may just be throwing good money after bad.
By law, you generally get your super only when you:
- permanently retire from the workforce, and also
- reach the minimum age set by law, called your 'preservation age', see the following table.
| Your date of birth | Minimum age for getting your super benefits |
| After June 1964 | 60 |
| July 1963 - June 1964 | 59 |
| July 1962 - June 1963 | 58 |
| July 1961 - June 1962 | 57 |
| July 1960 - June 1961 | 56 |
| Before July 1960 | 55 |
You can get your super earlier only in limited circumstances
Incapacity
Contact your fund if you suffer permanent incapacity. You may also be paid a non-commutable income stream during a period of temporary incapacity.
Severe financial hardship
Contact your fund. If the rules allow early release of benefits, you must satisfy the trustee that you have been receiving a Commonwealth income support payment for a continuous period of 26 weeks and you cannot meet your reasonable and immediate family living expenses.
Compassionate grounds
Contact your fund. If the rules allow early release of benefits, the 'compassionate grounds' are set out in the law. The Australian Prudential Regulation Authority (APRA) must consider your application first, before your fund trustee can make a final decision.
Compassionate grounds involve medical treatment for serious conditions that is not readily available through the public health system, transport for medical treatment, changes to a home or vehicle because of a severe disability, palliative care, funeral and burial expenses, or to prevent the forced sale of your home by your mortgagee. APRA has more information about specific compassionate grounds.
Leaving Australia permanently
Contact the ATO. If you work in Australia as a temporary resident you may be eligible to claim your super. This payment is not available for permanent Australian or New Zealand citizens because they have the option of retiring in Australia.
Small balance
Contact your fund. If the fund rules allow it and you account has less than $200 (preserved benefit) you may be allowed to withdraw the money when you finish your employment. A fund may be able to pay you if you were previously classified as a lost member and the preserved benefit, at the time it is paid to you, is less than $200. Unless you really need the money, it's generally better to roll it over into your next fund, and you won't have to pay tax.
Illegal early access
Australians are being warned to steer clear of illegal offers to release their superannuation benefits before retirement.
The promoters of illegal early release schemes deliberately target people experiencing financial difficulties. It’s understandable that people may be attracted to such promotions particularly when they are doing it tough with meeting financial commitments, such as home loan repayments.
In very limited circumstances it may be legally possible to access some of your super early, however, this should really be a last resort because it will leave you with less money in retirement. Look into other options to deal with financial difficulties first such as making an application for a hardship variation on your loans or getting assistance from a free and independent financial counsellor.
Some promoters have also enticed people to roll their super into a self-managed super fund (SMSF) so they can access the money early to pay off their debts. Unless the legal tests for accessing super early are met, this is illegal. ASIC has seen some illegal early release promoters take significant fees of up to 30 per cent before forwarding the rest of the super savings to the client, which they’re not entitled to access anyway.
As well as the risk of losing their hard-earned super savings, victims may suffer severe tax complications as a result of the fraudulent payments involved with early release schemes.
Schemes offering early access to super are illegal and attract significant legal and financial penalties to promoters and clients. If you’re in an SMSF, you are the trustee of your fund and must operate the fund in accordance with the law. Failing to meet this obligation is, in most cases, breaking the law.
If you receive an offer to access your super through an illegal scheme, contact ASIC’s Infoline on 1300 300 630 or the ATO on 13 10 20 to report your concerns.
True stories
If you have a friend who is dealing with an adviser who is urging them to access their funds please tell them that:
- in the past promoters have taken a large proportion of people's funds
- they may face financial penalties under the Income Tax Assessment Act if they go ahead
- they should get independent advice from their lawyer, employer or union representative.
True stories from victims of early release schemes
A superannuation dream betrayed
Read what happened after Kim acted on an advertisement that said people could take control of their own superannuation.
Rick's superannuation nightmare
'I'm really frightened because now we have no assets of our own and I don't have any superannuation at all. How are we going to fund our retirement?' Read about Rick’s redundancy and how a flyer under his windscreen wiper led to his nightmare.
Some schemes we've taken action against
