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COVID-19 and early access to your super

Last updated: 1 April 2020

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Key points

  • If you are experiencing financial stress as a result of coronavirus you may be able to access up to $10,000 of your superannuation in 2019-20 and a further $10,000 in 2020-21
  • You apply directly to the ATO through the myGov website
  • You cannot apply through Sunsuper
  • Applications are open from 20 April when the ATO deploys the application form.
  • If you are eligible, you can make one application in the 2019-20 financial year.
  • If you are eligible, you can make a second application in the 2020-21 year prior to 24 September 2020 when the measure ends.
  • If the ATO approves your application, they will notify us within 1-2 business days.
  • We will make the payment to you as quickly as possible
  • Early access payments are tax-free
  • Early access payments won’t affect Centrelink or Veterans’ Affairs payments
  • Early access payments won’t change the existing ways to apply for early access to your super

Temporary early access to your super

While superannuation helps people save for retirement, the Government has recognised that for those significantly financially affected by the coronavirus, accessing some of those savings today may outweigh the benefits of maintaining those savings until retirement.

Eligible individuals will be able to apply online through myGov from 20 April when the ATO deploy the application form. If you're eligible, you will be able to access up to $10,000 of your superannuation before 1 July 2020. If you are eligible, you will also be able to access up to a further $10,000 in the 2020-21 year but you must apply prior to 24 September 2020 when the measure ends.

It is important to note, you cannot apply through Sunsuper directly.

 


Am I eligible?

To apply for early release of your super, you must satisfy one or more of the following requirements:

You are unemployed,

or

You are eligible to receive a:

  • job seeker payment, or
  • youth allowance for jobseekers, or
  • parenting payment (including the single and partnered payments), or
  • special benefit, or
  • farm household allowance,

or

On or after 1 January 2020, you:

  • were made redundant, or
  • had your working hours reduced by 20% or more, or
  • are a sole trader and your business was suspended or there was a reduction in your turnover of 20% or more.

 


Consider the impact on your balance at retirement

If you are experiencing financial stress as a result of coronavirus, you may have a real and immediate need to access your super early in these challenging times. However, before you do, it is important to consider that $20,000 in your super now would grow to a significantly higher amount by the time you retire – because of compound interest.

Put simply, compound interest is “interest on interest”: as your super balance earns interest and grows over time, you earn interest on this higher balance. And the longer you keep earning interest on your balance, the more you will forgo by accessing your super now.

This is shown in the graph below. For example, if you are 35 years old and access $20,000 from your super today, you will forgo around $80,000 that you would have had in your super account at retirement.

Impact of super withdrawals on future balances

Source: SuperRatings with modelling and assumptions: based on ASIC’s MoneySmart calculator using a Growth option with an assumed investment return of 5.0% before fees and taxes on earnings.

 


Will my insurance be affected?

If your account balance is less than $6,000 at 1 April 2020, your insurance cover may cease effective 1 April 2020 – this is to ensure your remaining balance is not further reduced by insurance premiums.

If you currently have insurance cover and you withdraw funds from your Sunsuper account through the early access provisions recently announced by the government, or for any other reason, and your account balance subsequently reduces to $0, your insurance cover may cease as there won’t be enough money to pay insurance premiums.

 

How do I claim my superannuation?

If you are eligible, you can apply online through myGov for early access to your super from 20 April when the ATO deploy the application form. 

Please note: you cannot apply through Sunsuper directly.

What is the process?

  1. Visit the myGov website from 20 April when the ATO deploys the application form.
  2. Certify that you meet the above eligibility criteria.
  3. Choose which super account you want to access (or accounts if you have multiple super accounts).
  4. Specify the amount you wish to access (up to $10,000) and the bank account you wish the amount to be paid into.
  5. The ATO will notify us within 1-2 business days.
  6. We will then make the payment to you as quickly as possible.
If you would like further information and guidance, please see the government’s fact sheet.

 


COVID-19 market update

Read the latest: from our Chief Economist to find out what Sunsuper is doing, what it could all mean for your super investment, and what (if anything) you should consider doing.