Members can access some or all of their preserved benefits before they reach the preservation age in limited circumstances.
The criteria, which are set out in the Act and regulations, have changed a number of times over the years. Currently, early access may be possible if:
- the member is suffering severe financial hardship;
- the member has been diagnosed with a terminal medical condition;
- a payment is warranted on compassionate grounds;
- the member is permanently incapacitated (in which case all preserved benefits are payable);
- the member is temporarily incapacitated (in which case a payment may be made under some conditions for the period of incapacity);
- the member has died (in which case all preserved benefits are payable);
- the preserved balance is under $200;
- the member is a temporary resident of Australia and permanently leaves Australia.
Severe financial hardship grounds
A member may be paid up to $10,000 a year from their preserved benefits if they:
- have received Commonwealth income support for at least 26 consecutive weeks, and
- cannot meet reasonable and immediate family living expenses.
A member over the minimum preservation age may be paid all their preserved benefits whether or not they can meet their living expenses if they:
- have received Commonwealth income support for at least 39 weeks since reaching that age, and
- are not working at the date of the application.
Payment may be made on compassionate grounds if the money is required for:
- the cost of medical treatment for a life-threatening or chronic condition that is not ordinarily available in the public health system for the fund member or a dependant;
- medical transportation costs for treatment required for a life-threatening or chronic condition for the fund member or a dependant;
- loan repayments to prevent a mortgagee sale or foreclosure (only the equivalent of three months mortgage repayments plus twelve months interest on the outstanding mortgage can be paid in any twelve month period);
- the cost of modifications to the home or motor vehicle of a severely disabled member or dependant to accommodate their special needs;
- palliative care expenses of a member;
- palliative care or funeral expenses of a dependant.
Applications on compassionate grounds
These are made to the Australian Prudential Regulation Authority by lodging a standard application form, with certain prescribed documentation.
The authority must be satisfied that the applicant does not have the financial resources to meet the expenses claimed.
Temporary residents who leave
When a temporary resident of Australia leaves the country permanently, all preserved benefits are payable, but usually the concessional tax rate for superannuation payments does not apply.
Any early access is subject to the rules of the relevant superannuation fund, which may restrict such access. For example, some superannuation funds do not allow access on grounds of financial hardship.
How to apply
With the exception of compassionate grounds applications (see above), all early release applications must be made to the relevant superannuation fund and are subject to the evidentiary requirements of the fund.
The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.