For many Australians, super could be a main source of retirement income, so the Government has rules around when you can access it to keep your savings for your future. However, the Australian Taxation Office (ATO) may let you take your super out early on compassionate grounds in certain circumstances.
Early release of super on compassionate grounds
Compassionate grounds include situations where you need to pay for:
- Medical treatment or medical transport for you or a dependant
- Palliative care for you or a dependant
- A payment on a loan or council rates so you don't lose your home
- Modifications to your home or vehicle, or buying disability aids for you or a dependant because of a severe disability
- Expenses associated with a death, funeral, or burial for a dependant.
Definition of dependant
A dependant is someone who relies on you for financial support. It could be your spouse, your child, or someone else who is financially dependent on you.
How much you can access
The amount you can withdraw from your super on compassionate grounds is limited to how much the ATO determines you will reasonably need.
If they approve your claim, the ATO will send you a letter telling you how much super you can withdraw.
Be aware that the amount deducted from your super account when you make your claim will include any tax payable, so it may be different to the amount shown on the ATO's letter.
Who can access their super on compassionate grounds
The ATO will assess if you are eligible for a compassionate grounds claim and will only let you access your super if you:
- Meet the legal eligibility requirements of the compassionate ground you’re applying for
- Have not paid for the expense – the ATO will only approve compassionate release of super to help you with unpaid expenses
- Can’t afford to pay the expenses without accessing your super (e.g. by getting a loan or using your savings)
- Are a citizen or permanent resident of Australia or New Zealand
- Provide all required supporting evidence and invoices/quotes.
Keep in mind that if you are aged 65 or over, you can access your super without restrictions, even if you're still working.
If you are aged 60 to 64, you can access your super as long as you are retired. If you're not ready to retire, you could start receiving regular payments from your super by opening a Transition to Retirement Income account.
Learn more about how to make a withdrawal from your super.
Compassionate grounds vs financial hardship
Taking out your super on "compassionate grounds" is different from accessing your super due to "financial hardship".
The main difference is that you need to be receiving income support payments from Centrelink to access your super due to financial hardship.
You also don't necessarily need to be experiencing one of the situations listed above to get your super due to financial hardship, but you do need to show you are unable to pay reasonable and immediate family living costs.
Find out more about financial hardship.
How to apply for your super on compassionate grounds
- Complete the ATO's online application form, which you can access via your myGov account
- Once the ATO assesses your claim and makes a decision, they will send you a confirmation letter letting you know the outcome
- If the ATO approves your claim, send us your letter from the ATO, along with a completed Application for Early Access on Compassionate Grounds form, which can be found at the back of our Compassionate Grounds Guide (pdf)
- Once we have received your completed form and ATO letter, we'll aim to process your payment within two weeks.
What else to consider
- The ATO will only approve a compassionate release of super to help you with unpaid expenses. This means if you have already paid the expense using a loan, a credit card, or money borrowed from family or friends, you won't meet their eligibility requirements.
- Your superannuation is there to support you in retirement, so if you take it out now, you will have less money to spend once you finish work.
- If you access your super before you reach the required age set by the Government, the taxable part of your super will be taxed at a maximum rate of 20% (plus any levies that apply). If you wait until you reach age 60 to access your super, no tax is payable.
- An early release of super may reduce your Centrelink payments or impact the amount of child support you receive or pay. Contact Centrelink for more information.
- Money in your super account is protected from creditors; however, if it is released early, it will lose this protection.
For more information about accessing your super early, visit the ATO website.