Due to COVID-19 pandemic, a lot of people are going through immense financial distress around the world. In Australia, the government has been taking several measures, including the early access to super funds, to reduce the effect of the economic crisis. If you are in financial distress due to COVID-19, you may be eligible to access a part of your superannuation early.
Eligible citizens and permanent residents of Australia and New Zealand can submit an application through ATO between 1 July 2020 and 24 September 2020 to access their super early. The government has announced that they will extend the application period to 31 December. If you want to know more about the scheme, please visit https://www.ato.gov.au/individuals/super/withdrawing-and-using-your-super/early-access-to-your-super/
The government has taken this measure to relieve the economic pressure on people who are adversely affected by the pandemic and have no other means to survive. However, you need to be very cautious before accessing your super early. It should only be used as a last resort. Early access to super can hurt your retirement savings. It also can have a more significant impact on your insurance than you would have expected.
We strongly recommend that you should seek professional advice before accessing your super early. If your income capacity has been affected by any injury or illness there may be alternative lump sums available to you.
Courtesy: Bonhi Banerjee
Edited: Malobi Sinha