Super and Early Release: What’s Allowed and What Isn’t

For many Australians, superannuation is one of the largest assets they’ll ever hold. It’s designed to fund life after work and comes with valuable tax advantages, but also strict rules about when and how it can be accessed.

While super is most commonly available at retirement, death, or permanent disability, there are limited situations where you may be able to access it earlier. Understanding these rules is essential, as the penalties for getting it wrong can be significant.

When Early Access May Be Allowed

There are two main pathways for early access to your super: financial hardship and compassionate grounds.

1. Financial Hardship

This applies when you are experiencing genuine financial difficulty and cannot meet immediate living expenses. To qualify, you must:

• Have received a qualifying Centrelink or DVA payment for a minimum period, and
• Be unable to meet essential costs such as rent, food, or utilities.

If approved, your super fund may release a limited amount to help cover those expenses.

2. Compassionate Grounds

Early access on compassionate grounds can be approved for specific situations, such as:

• Paying for medical treatment or transport for a life-threatening illness or injury
  
• Funding treatment to alleviate chronic pain or mental illness
  
• Preventing foreclosure on your home due to overdue mortgage payments

To apply, you’ll need to submit an application to the ATO via your myGov account, along with supporting documents like medical certificates or mortgage statements. If approved, the ATO will direct your superannuation fund to release enough money to cover the expense.

ATO Warnings on Misuse

The ATO has recently raised concerns about medical and dental providers promoting early super access for cosmetic treatments, often advertised on social media as “super-funded smile makeovers.”

These promotions are misleading and can result in serious consequences. Accessing your super for reasons outside the approved conditions of release is considered illegal early access.

You should never:

• Share your myGov login or credentials with another person or organisation
  
• Allow a third party to make a superannuation application on your behalf
  
• Make a false declaration about your situation or medical condition

The ATO’s article Separating fact from fiction on accessing your super early outlines these risks in more detail and reinforces the importance of following the correct process.

Penalties and Risks

If you or your self-managed super fund (SMSF) access funds outside of the approved rules, you could face:

• Heavy tax penalties on the withdrawn amount
• Disqualification as an SMSF trustee
• Potential prosecution for breaching superannuation laws

It’s vital to ensure your situation genuinely meets the ATO’s early access criteria before applying.

Getting Professional Support

Superannuation is there to support your future and careful decisions now can help preserve your long-term security.

Contact Trekk Advisory if you have questions or concerns about early access to your superannuation. We’re here to guide you through your options safely and confidently.