The ATO has been receiving an increase in calls from people experiencing severe financial hardship or wanting to access their superannuation to assist with general expenses. Unfortunately, these circumstances do not meet the grounds for compassionate release.
The ATO has stated that access to superannuation for severe financial hardship can only be requested by members to their funds.
To release benefits under severe financial hardship, funds need to be satisfied that the member can’t meet reasonable and immediate family living expenses or has been receiving relevant government income support payments for a continuous period of 26 weeks and was receiving that support at the time they applied to the trustees.
Even in these cases the payment from a super fund can only be a single gross lump sum of no more than $10,000 and no less than $1,000 (or a lesser amount if the member’s benefits are less than $1,000). Only one payment is permitted in any 12-month period.
Alternatively, if the member has reached their preservation age plus 39 weeks, the ATO needs to be satisfied that the member has been receiving relevant government income support payments for a cumulative period of 39 weeks since reaching their preservation age or was not gainfully employed on a full-time or part-time basis at the time of applying to the trustees.
If a fund releases benefits under these circumstances, there are no cashing restrictions.
