There are restrictions to accessing superannuation benefits prior to reaching age 65.In some cases limited cashing restrictions are available.In this article we will go the cashing restrictions of super for severe financial hardship.
Under preservation age
If a member is under preservation age the trustee of a superannuation fund will need to be satisfied that the member:
- is and has been continuously on Commonwealth income support benefits for 26 weeks, and
- is unable to meet reasonable and immediate family living expenses
If the trustee is satisfied that this applies then the member is able to access a single lump sum amount of between $1,000 and $10,000 per annum.
Reached preservation age
If a member has reached preservation age and 39 weeks the trustee will need to be satisfied that the member:
- has been on Commonwealth income support for a cumulative period of 39 weeks since reaching preservation age; and
- is not gainfully employed for at least 10 hours per week
If the trustee is satisfied that this applies then the member is able to access the entire benefit.
From an audit point of view we would be requiring to review the supporting documentation from the member, including relevant documentation from Centrelink confirming the 39 week period applies, and documentation from the member that is unable to meet reasonable and immediate family expenses, or statements confirming that the member is not gainfully employed for at least 10 hours per week.
It is important that the member has been on Commonwealth income support for the allocated period, and either unable to meet reasonable and immediate family living expenses, or not gainfully employed for at least 10 hours per week if over preservation age.
