Australian Government, "Fact sheet: Early access to superannuation" (COVID-19 Economic Response)

Summary

An Australian Government COVID-19 Economic Response fact sheet on early access to superannuation. It states that individuals affected by the Coronavirus could access up to $10,000 of their superannuation before 1 July 2020 and a further $10,000 from 1 July 2020 until 31 December 2020, applying online through myGov. It states that the application period was extended from 24 September 2020 to 31 December 2020, that eligible temporary visa holders could apply for a single release of $10,000 before 1 July 2020, and that released amounts are not taxed and do not affect Centrelink and Veterans' Affairs payments or the JobKeeper Payment.

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                                                                            COVID-19 Economic Response




Early access to superannuation
The Government has allowed individuals affected by the Coronavirus to access up to
$10,000 of their superannuation in 2019 20 and allowing them to access a further
$10,000 in 2020 21.


Summary
While superannuation helps people save for retirement, the Government recognises that for
those significantly financially affected by the Coronavirus, accessing some of their
superannuation today may outweigh the benefits of maintaining those savings until retirement.

Eligible Australian and New Zealand citizens and permanent residents were able to apply online
through myGov to access up to $10,000 of their superannuation before 1 July 2020. They are
also able to access up to a further $10,000 from 1 July 2020 until 31 December 2020.

The Government is extending the application period for the measure from 24 September 2020
to 31 December 2020 to increase the scope for individuals who may still be financially impacted
by Coronavirus to access early release in the coming months.

Eligible temporary visa holders were also able to apply for a single release of $10,000 before
1 July 2020.

People accessing their superannuation will not need to pay tax on amounts released and the
money they withdraw will not affect Centrelink and Veterans’ Affairs payments, or the
JobKeeper Payment.

Eligibility

Australian and New Zealand citizens and permanent residents
To apply for early release you must satisfy any one or more of the following requirements:
•     you are unemployed; or
•     you are eligible to receive a job seeker payment, youth allowance for jobseekers,
      parenting payment (which includes the single and partnered payments), special benefit or
      farm household allowance; or
•     on or after 1 January 2020:
             you were made redundant; or
             your working hours were reduced by 20 per cent or more; or
             if you are a sole trader — your business was suspended or there was a reduction in
             your turnover of 20 per cent or more.




COVID-19 Economic Response – Early access to superannuation      Last updated: 15 October 2020    1
How to apply
If you are eligible for this new ground of early release, you can apply directly to the ATO through
the myGov website: www.my.gov.au. You will need to certify that you meet the eligibility
criteria relevant to your circumstances.

After the ATO has processed your application, they will issue you with a determination. The ATO
will also provide a copy of this determination to your superannuation fund, which will advise
them to release your superannuation payment. Your fund will then make the payment to you,
without you needing to apply to them directly.

Separate arrangements will apply if you are a member of a self-managed superannuation fund
(SMSF).

Further guidance on the application process is available on the ATO website: www.ato.gov.au.

Timing
You were able to apply for early release of your superannuation from 20 April 2020.

Budget impact
This measure is expected to have a cost of $2.22 billion over the forward estimates.


  Ed the bartender
  Ed works in a popular bar in Melbourne. As a result of the Coronavirus, Ed has had his work
  hours reduced from 40 hours on average in the second half of 2019 to 20 hours per week
  on average in May 2020. As a result, Ed determines that his hours over the last month
  have reduced by more than 20 per cent compared to the average of his hours over the last
  six months of 2019.

  Ed decides to apply for the early release of $8,000 of his superannuation in May 2020 to
  help pay his rent and other living expenses. Ed self certifies that he is eligible for early
  release on myGov. He could have applied for up to $10,000, but chose not to. Ed cannot
  seek any further early release of superannuation in 2019 20 on the grounds that he has
  been affected by the adverse economic effects of the Coronavirus.

  However, Ed finds after 1 July 2020 that his hours continue to be reduced by more than 20
  per cent compared to the average of his hours in the last six months of 2019. Ed decides to
  make a second application and self certifies through myGov that he is eligible for early
  release. He is able to apply again for a release of up to $10,000 of his superannuation. Ed
  submits a second application for the full amount of $10,000 this time.

  For each application, the ATO approves Ed’s early release and notifies both him and his
  superannuation fund. Ed has received a total of $18,000 of his superannuation in two
  separate payments. He will not be taxed on this amount and is free to spend this money on
  anything he chooses, or save it for future expenses. He is also free to recontribute any
  unused amounts to his superannuation in the future (within his contribution caps).




COVID-19 Economic Response – Early access to superannuation       Last updated: 15 October 2020   2
  Rachel the sole trader
  Rachel is a sole trader with a catering business. At the end of July 2020, Rachel seeks to
  apply for an early release from her superannuation for the 2020-21 financial year.
  Due to the economic effects of the coronavirus, Rachel’s turnover for July is $5,000
  compared to $10,000 on average per month for the second half of 2019. Rachel therefore
  determines that her turnover has reduced by more than 20 per cent compared to her
  average turnover over the last six months of 2019.
  Rachel self-certifies that she is eligible for early release and applies to have $10,000
  released from her superannuation.



For more information
For more information on the Australian Government’s Economic Response to the Coronavirus
visit treasury.gov.au/coronavirus.

Businesses can visit business.gov.au to find out more about how the Economic Response
complements the range of support available to small and medium businesses.




COVID-19 Economic Response – Early access to superannuation       Last updated: 15 October 2020   3


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