Applications to access superannuation benefits early due to circumstances of severe financial hardship require some particular conditions to be met with regard to social security payments before they can achieve the desired outcome, a technical expert has said.
BT Financial Group advice strategy and technical specialist Tim Howard noted two situations involving government income support needed to be satisfied before any superannuation payments can be made early using this relief condition.
The first of these applies to individuals who have not reached preservation age plus 39 weeks.
“[For clients in this situation] in order for them to access some of their superannuation under severe financial hardship they firstly need to have been in receipt of government Centrelink support payments for at least 26 weeks,” Howard told attendees of the latest BT Academy technical webinar.
He noted this is a common element that prevents applications for this type of early access to retirement savings benefits from being successful.
“When we take calls from advisers investigating options for clients in this [situation], often the client is not in a position at that point where they have been in receipt of income support for a long enough period of time,” he said.
He pointed out if this condition has been met and the individual can prove they cannot meet reasonable and immediate family living expenses, they will be eligible to receive a one-off payment from their super fund of between $1000 and $10,000.
According to Howard, members who have reached their preservation age plus 39 weeks also have to meet a social security requirement.
“[People in this age bracket] need to have been receiving government income support payments for a cumulative period of 39 weeks,” he said.
Individuals who satisfy this condition and have not been gainfully employed either on a full-time or part-time basis at the time of applying for the relief will have no cashing restriction on the amount they can draw down from their super benefits.
