Redundancy, perhaps arising from the impact the coronavirus has had on businesses, should be considered as another means of access to an individual’s superannuation benefits, a technical manager has said.
Challenger head of technical services Andrew Lowe alerted advisers taking part in the latest Accurium Tech Hub webinar that a person who has been made redundant due to the current economic environment may be able to access their super for financial relief, outside of any specific government initiative, if their individual circumstances will allow it.
“While I would highlight that redundancy is itself not a condition of release, a client might find themselves satisfying a condition of release because of their redundancy in concert with their age,” Lowe said.
“So what they might find is that they don’t meet a redundancy condition of release, because there isn’t one, but they might find themselves meeting a retirement condition of release.”
He said there are several legal definitions of retirement that may be applicable when a person has been made redundant.
“Broadly I meet the retirement condition of release where I’m between my preservation age and age 60 and I cease an employment arrangement and I declare permanent retirement. [That means] I’m not going to return to the workforce at least [in a] part-time [capacity] at any point in the future. That’s my first definition,” he noted.
“My second definition is [if I’m] aged between 60 and 65 and effectively I can meet that definition simply by ceasing the employment arrangement and redundancy would be ceasing an employment arrangement, and so that would effectively allow me to access my superannuation benefits at that particular point.
“And certainly attaining the age of 65 would allow me to access my preserved superannuation benefits as well.”
The government announced on 23 March that superannuation fund members would be able to access up to $10,000, on two separate occasions, as part of its COVID-19 economic relief measures but placed restrictions around the circumstances under which the funds could be withdrawn.
