Accessing your super under severe financial hardship

Superannuation is your financial safety net for retirement, so the general rule is that you can't dip into it early. However, there are some exceptions, particularly in cases of severe financial hardship.

If you're facing tough times and struggling to cover basic living expenses or dealing with debt, you may be able to access your super earlier than expected.

In this post, we’ll walk you through everything you need to know about accessing your super during financial hardship: the things to keep in mind before you apply, whether you qualify, and the application process.

Things to think about before accessing early release

Deciding to access your super early isn’t something to take lightly. While it might seem like a quick fix for immediate financial struggles, there are several important factors you need to consider before making that decision.

Here are the key points to think about:

Impact on your retirement income.
Taxes charged on an early release payment – this is between 17% and 22% for most applicants under 60.
Superannuation cover (insurance) paid for with super.
You can only receive a financial hardship payment once every 12 months.
Whether you are eligible for any other support payments.

Eligibility criteria

In order to access your superannuation on the grounds of financial hardship you must be able to demonstrate that you are unable to meet reasonable and immediate family living expenses.

An immediate expense is one that is due and payable. To show that you are unable to meet these expenses, you will need to prove that your expenses exceed your income.

To apply, you must meet all of the following criteria:

You’ve been receiving an eligible Centrelink Income Support payment for the last 26 consecutive weeks (Abstudy, Austudy, and Youth Allowance as a full-time student are not eligible) and continue to receive such payments at the time of application. The Department of Treasury decides which income support payments qualify for early release of super. You should check here before applying.
You are unable to meet reasonable and immediate family living expenses
You must be an Australian citizen or permanent resident.
You have not received a severe financial hardship payment in the last 12 months from any super account.

Alternatively, you may also be eligible if you have reached preservation age plus 39 weeks. See the ATO website for these eligibility requirements.

There are strict laws around the early release of super, so if you do not meet all of the criteria, you will not be eligible to withdraw your super. Super funds cannot make exceptions.

If you are not eligible

If you’re not eligible for an early release of super under severe financial hardship, there are other options available:

1. Other early release of super options

(a)Early release of super under compassionate grounds - this payment is administered by the Australian Taxation Office (ATO).
(b)Early release of super due to a terminal medical condition - you may be able to access super if diagnosed with a terminal medical condition.
(c)Early release of super due to permanent incapacity - if you are permanently incapacitated, you may qualify for an early release.

The Application Process: What you need to know

Applying for early access to your super due to severe financial hardship is not automatic. There are strict rules and documentation requirements that must be met in order for your application to be approved. To make sure everything goes smoothly, here’s a breakdown of what you’ll need to do:

1. Start with the early release form

Complete the Early Release of Superannuation Benefits form. You can get the form by contacting our Member Services Team at hello@crueltyfreesuper.com.au.

Fill out all the relevant sections and provide accurate personal details. If you’re unsure about something, don’t hesitate to reach out to us for help. We’re here to guide you through the process.

2. Provide bank account details

You’ll need to supply your bank account details for where the payment should be made if your application is successful. This must be an account in your name (or jointly in your name). You’ll also need to provide a bank statement that matches the details you’ve listed. See the "Documentation required" section for more info on what to include.

3. Physical signature

This form requires a physical signature and cannot be digitally signed. After filling out the form, print it off, sign it with a pen, and either scan or take a photo of it. You can email the scanned or photographed page to us. If you don’t want to print out the entire form, you can complete the rest of the form digitally and print just the page that needs to be signed and attach it altogether.

4. Limit on the amount you can withdraw

You cannot request an amount greater than $10,000 if you are under preservation age. You’ll need to include supporting documentation, such as records of your expenses and debts, to justify your request. This ensures that you are withdrawing only what is necessary for your immediate financial needs.

Note: the minimum amount you can withdraw is $1,000 unless your balance is below this amount.

5. Verify your income and expenses

As part of the application, you’ll need to confirm your total weekly income and expenses. For approval, your expenses and debts must outweigh your income. This is a crucial requirement, as it demonstrates the financial hardship you're experiencing.

Documentation required

Once you’ve filled out the Early Release of Super form, gather the supporting documents below that will help with processing your application.

1. A bank statement showing the past 3 months of transactions. The statement must clearly show:

(a)Account name, account number, and BSB
(b)The account must be in your name (or jointly in your name)
(c)It must be for the account where your Centrelink payments, and any other income are received and where your transactions are made,
(d)If this account is no longer active, a bank statement will also be required for your new account, as this is where the payment will be made if your application is approved.

2. A Q230 letter from Centrelink OR provide your Centrelink Reference Number (CRN) confirming you meet the income support requirements for severe financial hardship. The Q230 letter is valid for only 21 days, so provide it as soon as possible after receiving it. If you provide your CRN on the application form, we can use Centrelink’s Confirmation eService (CCeS) to check your eligibility directly with Centrelink.

3. An income statement from Centrelink showing your income. You can request it here.

4. Verification of your identity is required to process your payment. We need all members to complete online verification, or provide copies of their ID that have been certified and signed as true and correct by an authorised person. Learn more

5. Provide documentation that shows evidence of your debt (if applicable), such as:

Credit card debt
Overdue loan
“Buy now, pay later” debt (e.g., Afterpay, ZipPay)
Overdue fines

The evidence must be dated within the last 90 days and include your full name, amount due, date due and date the letter was generated. Future debts or expenses cannot be listed.

Where do I submit my application?

Once your documents are ready, email them to us at hello@crueltyfreesuper.com.au. Our team will review them to confirm everything is complete.

After confirmation, if you have not consented to electronic ID verification, you will need to post your application to:

PO BOX 886
Wollongong
NSW 2500

We recommend sending the application via registered post so there is a tracking number. Keep this tracking number and email this to us so we can keep an eye out for it.

Members who have consented to electronic ID verification can submit their applications via email.

How long does it take?

Once we have received your completed application and supporting documentation, the application will be assessed. This can take 5-10 business days. During the assessment, additional documents may be requested to help with the assessment.

If your application is approved, the payment will be processed, and your mailed certified ID will be verified.

Once verified, the payment will be made to your nominated bank account within 3 business days. Your bank may take an additional 1-2 business days to process the payment.

How much tax will I be charged?

If you are under the age of 60, your payment will generally be taxed at the same rate as lump-sum super payments, which is 17-22% (including Medicare levy). If you're over 60 years old, you won't be taxed unless the lump sum includes an untaxed element.

How often can I apply?

You can apply for a severe financial hardship payment every 12 months.

We understand that applying for a severe financial hardship payment can be a difficult and lengthy process. Please make sure to read the eligibility criteria carefully and gather all relevant documentation to support your application.

We are here to help you. Please reach out to us on hello@crueltyfreesuper.com.au if you have questions.