The Australian Taxation Office has announced the compassionate release of early superannuation amount to a member who needs an access in limited circumstances. The only condition is that the member must not have any other means of paying for the expenses.
Though the release is now possible, the amount of super a member can withdraw is limited to what they reasonably need to meet the unpaid expense. On compassionate grounds, the money withdrawn by a member can be used to pay for:
- Any medical treatment and medical transport for members themselves or a dependant
- Making a payment on a home loan or council rates so they don’t lose their home
- Modifying their home or vehicle to accommodate their or dependant’s severe disability
- Paying for palliative care for themselves or a dependant
- Expenses associated with the death, funeral, or burial of a dependant
Eligibility For Compassionate Release Of Super
The ATO stated that it could only approve the release of member’s super on compassionate grounds, only if they meet all of the conditions listed below:
Condition 1 – Eligibility requirements of the compassionate ground while applying must be met for:
- Medical Treatment Or Transport
- Accommodating A Disability
- Palliative Care For A Terminal Illness
- Funeral Expenses For Your Dependant
- Preventing Foreclosure Or Forced Sale Of Home
Condition 2 – Compassionate release of super only to help with unpaid expenses. If you have already paid the expense, no matter by borrowing from someone or with a credit card, you do not meet the eligibility requirement.
Condition 3 – A member is unable to pay all or a part of their expense without accessing the super or the expense is not fully paid by:
- Getting A Loan
- Using Your Savings
- Selling Shares, Investments Or Assets
Condition 4 – A member is or has been a citizen or permanent resident of Australia or New Zealand. Temporary residents are not eligible to apply for the compassionate release of super and do not meet the eligibility condition.
Condition 5 – A member provides all required supporting evidence and unpaid invoices or quotes.
So, these were the eligibility criteria and the grounds under which the release of early superannuation can be approved. For more information on applying for compassionate super release, feel free to talk to our tax consultants at KPG Taxation.