Applications for early release of super will be accepted through myGov from 20 April 2020. You can register your interest now by logging in to your myGov account and following the Intention to access coronavirus support instructions. If you don’t already have a myGov account, you can set one up by selecting 'create an account'. The Australian Taxation Office (ATO) will notify you by email or SMS when applications open.
To apply for early release, you must satisfy any one or more of the following requirements:
- you are unemployed.
- you are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment, special benefit or farm household allowance (access to such support payments will be fast-tracked under the Coronavirus supplement).
- on or after 1 January 2020, either:
- you were made redundant; or
- your working hours were reduced by 20% or more; or
- if you are a sole trader — your business was suspended or there was a reduction in your turnover of 20% or more.
Applicants will need to certify that they meet the above eligibility criteria. The ATO will make a determination as to their eligibility, and if eligible, they will advise the relevant super fund to make the payment direct to recipient. You will not be required to attach evidence to support your application; however, you should retain records and documents to confirm your eligibility.
Separate arrangements will apply for members of a self-managed superannuation fund (SMSF). Please contact the ATO for further information.
TEMPORARILY REDUCING SUPERANNUATION MINIMUM PAYMENT AMOUNTS
For many retirees, the significant losses in financial markets as a result of the COVID-19 crisis are having a negative effect on the account balance of their superannuation pension or annuity.
To assist retirees, the Government has reduced the minimum annual payment required for account-based pensions and annuities, allocated pensions and annuities and market-linked pensions and annuities by 50% in the 2019–2020 and the 2020–2021 financial years.
Superannuation and annuity providers calculate the minimum annual payment required at 1 July each year, based on the account balance of the member or annuitant. The 50% reduction will apply to the calculated minimum annual payment.
This will reduce the need for retirees and account-based pensioners to sell investments to fund minimum drawdown requirements.
EXAMPLE
Robert is 67 years of age. At 1 July 2019, Robert’s account-based pension balance was $480,000. Robert’s minimum annual payment was calculated at 5% (the percentage applicable to his age) of his pension balance, which is $24,000. Following the law change, Robert’s required annual minimum pension payment for 2019–2020 is $12,000.
If Robert has already withdrawn more than $12,000 for 2019–2020, he is not able to put the amount above $12,000 back into his superannuation account unless he’s eligible to make superannuation contributions and subject to any other rules or limits such as contribution caps.
SUPERANNUATION PENSIONS AND ANNUITIES THAT HAVE ALREADY COMMENCED
For pensions and annuities that commence part-way during the 2019-2020 or the 2020-2021 financial year, the 50% reduction applies to the minimum annual payment that is calculated proportionally on the account balance on commencement day.
EXAMPLE
Thomas commences an account-based pension on 1 January 2020 at age 66. His pension account balance on the commencement day is $250,000. Under current minimum drawdown requirements, the minimum annual payment amount would be $12,500 (5% of $250,000). As the pension commenced on 1 January 2020, the required minimum amount is calculated proportionately from the commencement day to the end of the financial year:
$12,500 (minimum annual payment amount) × 182 (days remaining) ÷ 366 (2020 is a leap year) = $6,215.
Following the temporary reduction in minimum drawdown requirements, Thomas is only required to drawdown 2.5% of his account balance, which is $3,107 ($3,110 rounded up to the nearest 10 whole dollars). If Thomas has already withdrawn over $3,110 for 2019-2020, he cannot put the amount above $3,110 back into his superannuation account unless he’s eligible to make superannuation contributions and subject to any other rules or limits such as contribution caps.
CHANGES TO SOCIAL SECURITY DEEMING RATES
As of 1 May 2020, the upper deeming rate will be 2.25% and the lower deeming rate will be 0.25%. The Government estimates the reduction will benefit around 900,000 income support recipients, including around 565,000 people on the Age Pension who will, on average, receive around $105 more from the Age Pension in the first full year that the reduced rates apply.
FOR MORE INFORMATION
Please refer to the EARLY ACCESS TO SUPERANNUATION FACT SHEET from The Treasury. It provides further details on eligibility requirements, how to apply, timing and examples.
Please refer to the PROVIDING SUPPORT FOR RETIREES FACT SHEET from The Treasury. It provides further details and examples.