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Early access to super amid coronavirus: Everything you need to know

Early access to super amid coronavirus: An explainer. Source: Wolf of Wall Street
Early access to super amid coronavirus: An explainer. Source: Wolf of Wall Street

As of 20 April, Aussies who have been financially affected by Covid-19 can access up to $20,000 of their superannuation early.

If you’ve been wondering how to go about it - or whether you should - here’s Yahoo Finance’s ultimate early access to superannuation explainer.

Early release of super during coronavirus

As part of the government’s second stimulus package announced on 21 March, Aussies will be able to access up to $20,000 of their super over the next two financial years.

That is, eligible citizens and permanent residents of Australia or New Zealand can apply to the Australian Taxation Office to access $10,000 of their superannuation in the 2019-20 financial year, and up to a further $10,000 in 2020-21.


Prior to this, you need to prove you were experiencing severe financial hardship, had a terminal illness, were a temporary resident or had less than $200 in your super account to do so.

However, you can only access your super twice. Meaning, if you withdraw $7,000 first, you won’t be able to withdraw the remaining $3,000 within that same financial year.

Am I eligible to access my super early?

To be eligible to access the super, citizens or permanent residents of Australia and New Zealand must be in one of the following circumstances:

  • Unemployed;

  • Eligible for JobSeeker, youth allowance, parenting payment, special benefit or farm household allowance;

  • On or after 1 January 2020, you:

    • Were made redundant;

    • Your working hours were reduced by 20% of more;

    • You were a sole trader and your business was suspended, or there was a reduction in turnover of 20% or more.

Temporary residents can also access their super early, but they must be in one of the following circumstances:

  • Hold a student visa that you have held for 12 months or more, and you are unable to meet immediate living expenses;

  • Are a temporary skilled work visa holder, your working hours have reduced to zero and you remain engaged with your employer.

  • Are a temporary resident visa holder (excluding student or skilled worker visas) and you cannot meet immediate living expenses.

How do I apply for access to my super early?

You can apply for early access to your super online through the ATO portal on MyGov.

There, you will be directed to fill out a self-assessment form and eligibility declaration, which the ATO will then assess.

If you’re deemed eligible, your super fund will deposit the money into your designated bank account within five days.

Here’s how to do it step-by-step:

  1. Go to myGov, then access the ATO service portal;

  2. Click on the ‘view’ button under the COVID-19 banner;

  3. Click ‘apply’ under the ‘Early release of superannuation’ banner;

  4. Click ‘apply’ in black;

  5. You’ll then need to show you are eligible for the release, which includes showing you are a citizen or temporary resident, providing a reason, and specifying how much you want to access;

  6. The ATO will issue you with a “determination” – a decision on your eligibility;

  7. If you are eligible, the ATO will send that determination statement to your super fund, advising the fund to release your payment;

  8. The fund will then make the payment to you “without you needing to apply to them directly”.

Should I access my super early?

As of 7 April, at least 360,000 Aussies had signed up for the early super access. In a Yahoo Finance survey of 698 readers, 69 per cent of respondents said they were going to access their super.

But while early super release can seem like a good way to get a quick cash injection, many experts are warning against it, saying it should be a last resort.

“Members should tread carefully and only think about cracking open their super after they’ve taken up the extra cash support on offer from the government - super should be the last resort given the impact it can have on your retirement nest egg,” Industry Super Australia chief executive Bernie Dean said.

Property and money expert Nicole Pedersen-MckKinnon also advises against it.

“I don’t love this,”she said. “Modelling shows a $20,000 withdrawal in your twenties becomes $80,000 less in your fund at retirement. And right now, you may well be selling at an historic low.”

In fact, a 20-year-old woman who accesses the full $20,000 from her super stands to lose as much as $120,000 from her balance by retirement, Industry Super Australia analysis shows.

A 30-year-old who also took $20,000 from their super could lose around $100,000, while a 40-year-old could lose $63,000.

Can my super fund refuse to release my super early?

Not all super funds allow early access to your super.

In fact, $44 billion hospitality superannuation fund, HostPlus, updated its product disclosure statement in light of the early access to super scheme to highlight its “absolute discretion” to “suspend or restrict” applications for cash withdrawals.

If your super fund does not allow early access, and you are out of options, you could switch funds, and then apply for early access.

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Yahoo Finance Breakfast Club.
Yahoo Finance Breakfast Club.