Early release of super
On March 22, the Federal Government introduced financial assistance measures to aid Australians experiencing financial difficulty as a result of the COVID-19 pandemic.
To apply for early release you must satisfy any one or more of the following requirements:
- you are unemployed; or
- you are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or
On or after 1 January 2020:
- you were made redundant; or
- your working hours were reduced by 20 per cent or more; or
- if you are a sole trader — your business was suspended or there was a reduction in your turnover of 20 per cent or more.
These include temporary changes to the conditions of early release of superannuation funds. These measures will not affect existing ways to apply for early access to your super.
From mid-April 2020, eligible members will be able to apply for the release of funds through the myGov website. Members affected by the Coronavirus can temporarily access up to $10,000 before 1 July 2020 and a further $10,000 from 1 July 2020 for up to three months. Members cannot apply through REI Super directly.
For some members their short-term, financial survival might rely on the ability to access the up to $20,000 from super that the scheme allows.
However, accessing superannuation early should be approached with extreme caution and only as a last resort.
Markets have been volatile, whipsawing up and down within any given trading day. Gains from one day have generally been lost the following day. While it is easy for investors to react to alarming headlines and to panic when events such as this outbreak occur, we believe that taking a more measured approach is key. While there are many ways this virus can impact the assets in which we invest, it is important to separate permanent damage, which will impact what a company or asset is worth over the long-term, versus temporary damage, which will be forgotten.
With market’s whipsawing up and down, fear and panic is driving returns. At present, markets are not focused on fundamentals, or what an asset is really worth. We expect that when this first phase of market volatility passes, investors will start to focus on fundamentals. It is always important to remember that investing is a long-term play.
Industry Super Australia analysis shows a 20-year-old who accesses the full $20,000 available under the scheme could lose more than $120,000 from their retirement balance. A 30-year-old who accesses $20,000 from super now could lose about $100,000 when they retire and a 40-year-old could lose more than $63,000*.
For more details about the early release of super initiative, please refer to the ATO - Early access to your super.