ATO provides deadlines for early access to super over Christmas
The ATO has released new information for individuals who need to access their superannuation early on compassionate grounds during the Christmas shutdown period.
The ATO offices will close from midday Friday, 24 December 2021, reopening on Tuesday, 4 January 2022.
The ATO said that for those who need a compassionate release of super determination before this time, it is recommended that you apply as soon as possible.
“Applications submitted after 10 December 2021 will likely be assessed in January 2022 when our offices reopen,” the ATO said.
“You will need to factor in additional time for your fund to release any approved amounts from your super account.”
The ATO reminded there are very limited circumstances when individuals 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 ATO noted.
“The amount of super you can withdraw is limited to what you reasonably need to meet the unpaid expense.”
Compassionate grounds include needing money to pay for medical treatment and medical transport for the individual or their dependant and making a payment on a home loan or council rates to not lose the home.
This also includes modifying a home or vehicle to accommodate your or your dependant’s severe disability, palliative care for you or your dependant, and expenses associated with the death, funeral or burial of your dependant.
“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,” the ATO explained.
“Your super fund will automatically deduct the tax from your super account.
“If you are a member of an exempt public sector super scheme (EPSSS), do not apply to us. You need to apply directly to your super scheme for early release of super. EPSSS have their own state and territory laws for early release of super. Talk to your super fund to find out if you are a member of an EPSSS.
“Be aware that some advisers claim to offer early access to your super by transferring your super into a self-managed super fund (SMSF). These schemes are illegal and there are heavy penalties if you participate.”
Tony Zhang is a Journalist at SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2020, Tony has covered various publications across the legal, financial and professional services sectors including Lawyers Weekly, Adviser Innovation, ifa and Accountants Daily.