Eligibility for Compassionate Release of Superannuation

If you’re facing significant financial hardship, you may be eligible for early access to your superannuation on compassionate grounds. Read on to discover key points to help you determine when this may apply.

Key eligibility criteria for compassionate release

The Australian Taxation Office (ATO) oversees applications for early super release on compassionate grounds, but approval depends on meeting specific criteria. You may be eligible if you have no other means to cover the expenses and the request falls into one of these categories:

• Medical expenses – costs for treating a life-threatening illness, chronic pain or mental illness for you or a dependant

• Disability accommodation – expenses for modifying housing to accommodate a disability for you or a dependant

• Palliative care – financial support for end-of-life care for yourself or a dependant

• Funeral expenses – covering costs for the funeral of a dependant

• Home foreclosure prevention – expenses to prevent the foreclosure or forced sale of your primary home

Important considerations

Super released on compassionate grounds is paid and taxed as a standard super lump sum. Any super withdrawn will count toward your assessable income for income tax purposes, so you must include it in your tax return. The tax rate varies based on factors like your age, preservation age and the components of your super lump sum. 

Before you apply, it is essential to check your eligibility requirements, gather documentation such as invoices or documents showing your relationship with the person you’re applying for and contact your super fund to confirm they will allow early release. Applications with incomplete evidence may be delayed or declined. 

It is important to note that accessing your super early, on compassionate grounds, can have long-term financial implications. Understanding the eligibility criteria and carefully considering all factors is crucial to ensuring a smooth application process and making the most of this financial support when it’s genuinely needed.

Reach out to your Simmons Livingstone advisor for personalised guidance on managing your super effectively while addressing immediate financial needs on 1800 618 800 or via email at admin@simmonslivingstone.com.au