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Should you access your super early?

Important things to consider before you apply through myGov

Last updated: 23 July 2020

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Key points

  • You may be eligible for one or more government payments right now.
  • You may also be eligible for early access to your super from 20 April.
  • Accessing your super early will lock-in short-term losses.
  • Accessing your super early will mean you’ll miss out on the market rebound.
  • Accessing your super early will mean you’ll miss out on compound interest.
  • You need to apply for early access to your super through myGov.

Are you eligible for immediate financial assistance?

If you’re feeling overwhelmed by money issues in this anxious and uncertain time, it can be hard to know where to turn. We have summarised the payments and other measures the government, banks and other companies are offering to immediately help Australians financially through the coronavirus crisis. You can find out more detailed information on the government and MoneySmart websites.

1. How can I access emergency financial support?

If you feel like your financial situation is an emergency, there are services that can help you with food, daily bills and emotional support. Call the free National Debt Helpline on 1800 007 007.

2. How do I access fortnightly payments through JobKeeper Payment?

Your employer will let you know if they will now be paying you the fortnightly $1,500 (before tax) JobKeeper Payment so you can remain employed and ready to help your employer restart their business quickly once the crisis is over. The government has announced proposed changes to JobKeeper, including extending the scheme until 28 March 2021. Find out more from the ATO.

3. Are there other income support payments available?

If you already receive or become eligible to receive the JobSeeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance or Special Benefit, you will receive an additional fortnightly coronavirus supplement of $550 per fortnight until 24 September 2020. The supplement will reduce to $250 per fortnight from 25 September and be paid until 31 December 2020. The income test for eligibility for the JobSeeker Payment and Youth Allowance will also change from 25 September, so you can earn more but still receive the maximum payment rates. Find out more

4. What household support payments are available?

If you already receive social security, veteran or other income support payments or are an eligible concession card holder, you will receive two automatic $750 economic support payments – one before 13 April and another from 13 July.

5. When can I get early access to my super?

From 20 April, you may be eligible to apply through the myGov website to access up to $10,000 of your super in 2019-20 and another $10,000 in 2020-21.

6. Is there support for mortgage repayments?

If you are having problems meeting your mortgage repayments, you can talk to your bank about changing the terms of your loan, or pausing or reducing your repayments under a hardship variation. For more information visit the Australian Banking Association.

7. Can I defer payment of bills?

If you are finding it hard to keep up with day-to-day utility, phone, rates or other bills, or fines, you may be able to arrange to defer payment, pay in instalments or get other short-term relief.

8. Can I be evicted for not paying rent?

The government has announced that you won’t be evicted from your rental property for the next six months if you are experiencing financial stress and can’t pay your rent. The National Cabinet is working on a "mandatory code" that will outline the eviction moratorium in more detail.

9. What support is available for business owners?

If you own a business, as well as the JobKeeper payments, there are a range of support measures available to help you manage your cash flow and keep your employees.

10. Can I get financial advice?

You can talk to a financial counsellor for free through a community organisation, community legal centre or government agency. Financial counsellors are trained finance professionals who can help you work through your immediate financial issues. To get started, you can call the free National Debt Helpline on 1800 007 007.


Three long-term implications of early access to your super

If you are experiencing financial stress as a result of coronavirus, you may have a real and immediate need to access your super in these challenging times. Are you aware, though, of the effect accessing your super early could have on your retirement savings? Consider these three long-term impacts.

1. Early access to your super will lock-in short-term losses

Given most people’s super investment includes some exposure to share markets, the recent market volatility will mean your super balance will have declined in the past month. Making a withdrawal from your super now will turn this unrealised or “paper” loss into a real or realised loss. This is often referred to as crystallising the loss.

It can help to think about it in relation to the property market. Unless you absolutely had to, you wouldn’t sell your house during a property market slump to avoid making a loss on your original investment. A similar principle applies with shares, and your super.

2. Early access to your super will mean you’ll miss out on the market rebound

All market downturns are temporary, even if they are severe in the short-term. Realising a loss by withdrawing your super now, after markets have declined, also means you will miss out on the eventual market rebound. A “paper” loss isn’t a loss at all once the market recovers.

We saw this following the Global Financial Crisis: a member who retired just prior to the GFC and stayed invested in Sunsuper’s Balanced option would have a significantly higher super balance today than if they had locked-in their loss after markets had fallen and switched their super to Cash. This is shown in the graph below.

Retired 31 October 2007 and minimum pension drawdown to 31 May 2020


Source: Sunsuper. Past performance is not a reliable indication of future performance. Assumptions: Member invested in the Sunsuper Balanced or Retirement option, age 65 on 1 July 2007, retired in October 2007 with $300k balance. Either stayed invested in Balanced or Retirement option, or switched balance to Cash on 31 January 2009. Minimum pension drawdown percentage from retirement to today.  

3. Early access to your super will mean you’ll miss out on compound interest

Your super balance, even after the recent share market volatility, will grow in value over time because of compound interest. Put simply, compound interest is “interest on interest”. Your super balance earns interest and grows over time; you then earn interest on this higher balance, and so on. And the longer you keep earning interest on your balance, the more you will forgo by accessing your super now. So your balance at retirement will be lower by not just the amount you withdraw now but also by the interest you would have otherwise earned on this amount, compounded each year, until you retire.

This is illustrated in the graph below. In summary, if you are 25 years old, $20,000 of your super now could grow to $57,966 by age 67. If you are 55 years old, $20,000 of your super now could grow to $27,106 by age 67.

The graph show if you are 25 years old, $20,000 of your super now could grow to $57,966 by age 67. If you are 55 years old, $20,000 of your super now could grow to $27,106 by age 67.  

Modelling assumptions: The projected results illustrated are based on modelling using the Sunsuper Retirement planner & calculator. The projections are illustrations only and actual results are not guaranteed. The results are shown in “today’s dollars” so they are consistent with today’s living standards by using a discount rate of 3.75% per annum, made up of 2.5% for inflation and 1.25% for the cost of rising living standards. Employer contributions are indexed annually at 3.75%. The starting account balance is $20,000 in all scenarios, including scenarios modelling withdrawal of the maximum COVID-19 early release payment of $20,000. The account balance is invested in the Sunsuper Balanced investment option until the current age pension age of 67 years assuming an investment return of 6.5% per annum after deduction of investment fees and costs and investment tax. The costs of gross administration fees and standard cover insurance premiums for the Sunsuper for life product are included. All relevant current tax and superannuation laws are applied. See Sunsuper’s Retirement planner & calculator for more detail on these assumptions.

Getting started with the process for early access to your super

If you decide that early access to your super is right for you right now, we want to help you through the process.

You need to meet some eligibility criteria and apply for early access through the myGov website, not through Sunsuper.