ATO flags shutdown period for members seeking early access
The ATO has urged anyone requiring access to their super on compassionate grounds to submit their application soon with the Tax Office due to shut for the Christmas period on 23 December.
In an online update, the ATO said during the Christmas period the ATO will close its offices from 12 noon on 23 December and reopen on 3 January 2023.
“If you require access to your super before our offices close, you should submit your application as soon as possible,” the ATO cautioned.
“Any applications for compassionate release of super that haven’t been finalised prior to 23 December 2022 will not be assessed until our offices reopen.”
For anyone applying, the ATO said members should ensure they have all required evidence ready so that the application can be assessed as quickly as possible.
“We recommend you wait for the outcome of your application and ensure you have received payment from your fund before you book the treatment or services that you have applied for.”
“Each application is individually assessed against the legislative requirements. We cannot guarantee your application will be approved.”
The ATO reminded members that there are very limited circumstances when they can access their superannuation early.
“You may be allowed to withdraw some of your super on compassionate grounds for unpaid expenses. This is where you have no other means of paying for these expenses,” the Tax Office stated.
The amount of super you can withdraw is limited to what you reasonably need to meet the unpaid expense, it said.
Compassionate grounds include needing money to pay for:
- Medical treatment and medical transport for you or your dependent
- Making a payment on a home loan or council rates so you don't lose your home
- Modifying your home or vehicle to accommodate your or your dependent's severe disability
- Palliative care for you or your dependent
- Expenses associated with the death, funeral or burial of your dependent.
“The super you withdraw is paid and taxed as a normal super lump sum. The tax rate depends on various factors, including your age and the components of the super lump sum. Your super fund will automatically deduct the tax from your super account,” the ATO said.
The ATO also warned that some advisers may claim to offer early access to your super by transferring your super into an SMSF.
“These schemes are illegal and there are heavy penalties if you participate,” the ATO warned.
