Temporary early access to super for people in financial distress

The Federal Government has passed legislation to allow temporary early access to super to assist members experiencing financial distress due to the COVID-19 pandemic.

Members who meet the eligibility criteria can access up to $10,000 of their superannuation in the 2020/2021 financial year.

Members need to apply online through myGov and the ATO will assess their eligibility. If members are eligible, the ATO will advise LGS to release the amount requested to the member.

No tax will be payable on the money withdrawn from the member’s account.

Applications for the 2020/21 financial year, can only be made in the period between 1 July and 31 December 2020.

Members of the LGS Retirement and Defined Benefit Schemes who are experiencing financial distress may be able to access some parts of their super benefit. These members need to contact LGS to ascertain how much and what part of their benefit they are eligible to access.

Members need to carefully consider how much money they need and the long-term impact on their retirement savings before accessing their super.

If unsure about accessing their super, members can request a request a phone appointment with an LGS financial planner.

Frequently asked questions

COVID-19 Early Release of super ends 31 December 2020

The ATO offices will be closing from midday 24 December 2020 and will reopen start of business on 4 January 2021. To support individuals submitting a COVID-19 early release of super application, there will be limited staff at the ATO during this shutdown period, they will be available for phone calls on the ATO line 1300 662 211.

If you are considering making an application for COVID-19 early release of super, this may affect your payment. When you apply for payment the ATO must send a notification to a person’s superannuation fund in order to let them know to process the application. This is generally sent on a daily basis, however over Christmas, there will be delays.
The arrangements for notifying funds of these requests and organizing payment will be;

  • Applications received up to 22 December will be sent to funds on 24 December 2020
  • Applications received on 23 December to the 28th December will be sent to funds on the 30 December 2020
  • For the remainder of requests received by the ATO up to the 31 December, the ATO will send these to Funds on 5 January 2020

The ATO will send you an SMS when they receive your application. Due to the delay in sending these files to Funds, it may take us a bit longer than 10 business days to process your payment.

Access to COVID-19 early release of super closes on 31 December 2020 at 11.59pm AEDT

If you are applying for early release on compassionate grounds, the ATO have stated that you will need to apply through the ATO online services in myGov by 4 December 2020 if you wish for this to be processed at the ATO before Christmas.

How do I know if I’m eligible to access my super?

You can access your super if you are experiencing genuine financial distress due to the COVID-19 pandemic.

The Federal Government has established the eligibility criteria and the details are available on the Australian Taxation Office website.

Please note that the ATO has strengthened its integrity and compliance measures to ensure that only eligible people are able to access their super. There are penalties for people who provide false or misleading information in their application.

I need money to get through the next few months but I’m not sure whether I should access my super. Are there any other options?

If you’re in financial distress, you may be able to access your super early but it should be done as a last resort as it will have an impact on your retirement savings.

Before you consider accessing your super, you should see if you are eligible for any of the following government assistance:

  • JobSeeker: COVID-19 supplement if you’ve lost your job and are receiving the JobSeeker payment (formerly Newstart).
  • JobKeeper: employers can claim a taxable fortnightly payment for each eligible employee, which they must pass on to employees.

Take a look at the government’s MoneySmart website, for more information on the assistance available together with advice on how to live on a reduced income, deal with your mortgage, make investment decisions and get urgent help.

I’ve made an application to access my super. How long will it take for the money to be in my bank account?

Starting from the date that you receive an SMS from the ATO confirming that your application has been processed, you should allow 10 business days for the money to be deposited into your bank account.

However, the processing time may be longer if additional verification or information is required to complete the transaction.

Do I have to pay tax on any funds I withdraw from my super?

There will be no tax payable on any withdrawals approved by the ATO under these temporary changes.

How will accessing my super now affect my retirement savings in the long term?

It’s important to carefully consider the impact on your retirement savings before withdrawing any money from your super.

Taking money out now can significantly reduce the balance of your super when you retire. In fact, over periods of 10, 20 or 30 years, the difference can be quite significant.

It’s important to know all your options before accessing your super. You may be eligible for government assistance and help from your financial institution to meet your current obligations.

For information on the steps you should take before applying to access your super, take a look at the Government’s Moneysmart website.

You can use our Retirement Projection calculator to estimate the likely impact of withdrawing money from your super on your long-term retirement savings.

Will accessing my super affect my insurance?

If you have insurance through your super, you will need to make sure you retain enough funds in your super account to meet your regular premiums. Otherwise your insurance cover may be cancelled.

More details about COVID-19 and insurance cover.

I’m a member of the LGS Retirement or the Defined Benefit Scheme. Can I withdraw money if I need it?

You may be able to withdraw money from your super if you are in financial distress and meet the ATO’s eligibility criteria.

However, if you are a member of the LGS Retirement Scheme or the Defined Benefit Scheme, you can only withdraw money from specific parts of your super.

You will need to contact us for more information.

Can I cancel my payment if I change my mind?

Yes, if you contact us before the payment is made, we can cancel the payment and retain the funds in your super account. However, you will not be able to re-apply for temporary early release of your super.

Can I re-contribute any money I don’t spend back into my super?

You can re-contribute some of these funds back into your super but it’s important to remember that the normal concessional and non-concessional contribution caps will apply.

The information on this website is of a general nature only and does not take into account your personal objectives, situation or needs. You should consider obtaining professional financial, taxation and or legal advice tailored to your personal circumstances prior to making any financial decision.