July 9, 2019

Regardless of how hard you work throughout your life, if you do not put money away for retirement, you could face a low-income stream in your golden years. Many people want to live out their goals after retirement, and those often include travel and enjoying the freedom of not being tied down to a job. In order to realize your post-retirement goals, it’s a good idea to start planning for your retirement in your younger years. Super annuation is a government program that encourages people to save for retirement and obligates employers to help their employees contribute. What is Super Annuation? The idea behind super annuation is that once people retire, they have an additional supplementary income stream in place to make up for no longer working. In order for the management and accumulation of super annuation funds, governments set up minimum contribution amounts for individuals and their employers. Contributing to a Super is further encouraged by the tax breaks it provides at tax time. When an employer is obligated to contribute to their employee’s Supers, they have to make those contributions on top of their regular salaries. Mandatory employer contributory rates range from 9.5 percent to 12 percent. People are further encouraged to and given the option of making additional contributions to their Supers by diverting more of their income on a regular basis, and this is often referred to as ‘salary sacrifice’. Accessing Super Early One of the main issues concerning accessing super early is when people have multiple Super funds and have to pay the relevant account fees. Rather than consolidating these funds into one account, when people fail to do so, it can cost them in additional account management fees. When it comes to accessing Super early, there are ways to apply for a ‘release’ of Super, but in order for that to be permitted without a big tax penalty, certain stipulations have to be met. Circumstances in which Supers are permitted to be released early include when someone is facing a terminal illness, have reached retirement, or when someone is facing an incapacity and cannot maintain gainful employment as a result. Cashing in any retirement fund prior to its maturity or when conditions of its release are met can mean taking a hit in terms of taxable income, or being denied access to it prior to retirement age. Governments do, however, make allowances for extreme situations in which people are desperate for their funds and are facing challenges that through no fault of their own have prevented them from being able to work or reach their full retirement age.

How to access to super early is only available under very limited circumstances. Often, most people are unable to access their super early unless under special conditions. Due to life’s uncertainties, most desperate persons usually fall victim to promoters who claim to be able to offer you access to your super early. They do so by convincing you that they can transfer it to a self-managed super fund. Beware that such schemes are deceitful and attract heavy penalties. If you’ve been wondering how to access super early, here are some revelations: Access Due to Severe Financial Strain Access to your super may be provided if you’ve been receiving income support from the government for a period of up to 26 weeks. Moreover, you will have to prove that you’re unable to meet daily family living expenses. Upon receiving your super as a result of financial hardship, it will be taxed as a super lump sum. Access on Compassionate Grounds Apart from severe financial hardship, you can also be allowed to withdraw your super based on compassionate grounds. Such grounds include: • Making loan repayments to prevent you from losing your house. • Paying medical bills for yourself or your dependant • Paying for expenses associated with a burial, funeral or the death of a dependent. • You are modifying your car or home to accommodate someone with special needs such as disability. Access due to Temporary Incapacity Severe mental and physical conditions may, at times, prevent you from engaging in productive work. Similarly, such circumstances may also force you to work fewer hours as opposed to your earlier schedule. Temporary incapacity provides fertile grounds that facilitate the release of benefits from a super fund. The payment will be disbursed at intervals over the entire period you’re unable to work. The funds will be taxed as a regular super income. Access Due to Terminal Medical Condition Terminal medical conditions are commonplace in today’s society. You will be able to access your super under a terminal medical condition if: • At least one of the registered doctors is a specialist who practices in a field related to your injury or illness. • Two doctors have separately or jointly certified that you have an injury or suffer from an illness that may result in death after a certain period. Access as a Result of Permanent Incapacity This kind of super withdrawal is also referred to as ‘super disability benefit’. Under such circumstances, you must prove that the incapacity will be a hindrance to your working ever again. The Bottom Line Access to super early is never an easy task. However, you should consult before you apply for super early. Moreover, you stand to be prioritised under the conditions mentioned above.