The Australian Taxation Office (ATO) have now released guidance on the process for accessing superannuation early from SMSFs and other superannuation funds to assist in cushioning the adverse economic effects of Coronavirus.
COVID-19 – Accessing your superannuation early
You may be aware that the Government recently announced measures which allow individuals affected by the economic impacts of COVID-19 to access a limited amount of their superannuation early.
The Australian Taxation Office (ATO) have now released guidance on the process for accessing superannuation early from SMSFs and other superannuation funds to assist in cushioning the adverse economic effects of Coronavirus.
How much can you take out?
You will be able to apply online through the myGov website (https://my.gov.au/) to access up to $10,000 of your superannuation before 1 July 2020.
You can access a further $10,000 of your super from 1 July 2020 until 24 September 2020.
You will only be able to make one request for each financial year. For example, should you nominate for a lesser withdrawal amount in 2019/20, you will not be able to apply again before 1 July 2020 for the remainder nor will you be able to apply for more than $10,000 from 1 July 2020.
If you access your superannuation you will not be required to pay tax on amounts released and any amounts withdrawn will not affect your Centrelink or Veterans’ Affairs payments. These amounts will also not be included in your assessable income for the financial year the withdrawal is made.
Satisfying early release requirements
Your superannuation is ordinarily preserved until your retirement. However, the new legislation allows you early access if you are adversely affected by the economic impacts of COVID-19.
To apply for early release of your superannuation, you must satisfy one or more of the following requirements:
- You are unemployed.
- 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.
- On or after 1 January 2020, any of the following happened:
- You were made redundant.
- Your working hours were reduced by 20% or more.
- You were a sole trader and your business was suspended or your turnover decreased by 20% or more.
These are the only requirements that must be considered.
How to apply to access your superannuation
If you satisfy one or more of the requirements entitling you to access your superannuation early, you can now register your interest to access through the myGov website (https://my.gov.au/).
After applying through myGov, the ATO will issue you with a determination advising of your eligibility to release an amount. Only once your SMSF receives the determination from you, will the trustee be authorised to make the payment. If you apply to access superannuation benefits from another superannuation fund that is not a SMSF (eg. industry funds, retail funds, etc.), the determination will be issued by the ATO direct to your APRA regulated fund and the trustee will proceed to release your benefits to your nominated bank account.
If you wish to discuss your specific circumstances in more detail and to ensure you aren’t breaching any regulations, please contact our office on (02) 4601-1000.
Product Disclaimer:
This is general information only. No investment advice has been provided to you. The information in this blog is general information only and has been prepared without taking into account your personal objectives, financial information and needs. You should consider any advice in this blog in light of your personal objectives, financial situation or needs before acting on it. You may wish to consult an accountant and or licensed financial adviser to do this. Hailston + Co assumes no responsibility for any actions you take independently, and without seeking professional advice from your accountant or licensed financial advisor.
