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 before 1 July 2020. Members can also access up to a further $10,000 from 1 July 2020 for a short period 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No tax will be payable on the money withdrawn from the member’s account.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 24 September 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.
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.
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:
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.
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.
For the current 2019/20 financial year you will need to apply to the ATO by 30 June 2020.
However, if do need to access your super later on, applications for the 2020/21 financial year can be made in the period between 1 July and 24 September 2020.
There will be no tax payable on any withdrawals approved by the ATO under these temporary changes.
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.
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.
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.
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 this financial year.
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.