On 23 March 2020, the Federal Government announced a $66b stimulus package to combat economic pressures facing Australians in the battle against COVID-19. The package includes measures providing for the early partial release of superannuation benefits in certain circumstances. Under this initiative, members were able to access up to $10,000 of their benefit last financial year (2019/20). Members will also be able to access up to $10,000 this financial year (2020/21) if they meet the eligibility criteria. Previously, the deadline for making an application was 24 September 2020, however the government has announced they will extend the application period to 31 December 2020.
The legislative changes introduced by the Federal Government allowing these payments to be made do not require defined benefit schemes to offer these payments. However, State Super has decided to make these early release payments available to members where they meet the eligibility criteria. For details on eligibility conditions, please visit: www.ato.gov. au/individuals/super/withdrawing-and-using-your-super/early-access-to-your-super/.
Effect on future benefit entitlements
It’s important to be aware that if you are a current contributor, a debt account (adjusted for interest) will be created. The accumulated debt will be deducted from your benefit when it is either deferred in the scheme or is paid to you e.g. at retirement age. The debt will be deducted from the SANCS benefit first. Details of your debt account will be shown on your Annual Statement.
If you are a deferred member, your benefit will be reduced when the early release payment is made. Details of your deferred benefit reduction will be shown on your Annual Statement.
Important note: Your early release payment on compassionate grounds can only be made if you provide written consent to a reduction in your scheme benefits to offset the early release.
What should I do if I want to apply for an early release payment?
- In the first instance, we recommend you call one of our team in the State Super Customer Service Centre (or email email@example.com) so they can explain the effect on your benefit by having an early release payment. They will also guide you to the relevant consent documentation – see “Important note” above.
- Should you still wish to proceed you will need to make an application directly to the ATO via the myGov website. If you meet the eligibility conditions and the ATO approves your application, they will notify us directly.
- You also need to complete STC Form 241: Application for Early Release of a Benefit on Compassionate Grounds to assist with the financial impact of COVID-19 (Coronavirus). Once we receive this form, and the approval of your application from the ATO, we will be able to process your payment.
Be Aware of phishing scams
There are several COVID-19 phishing scams circulating via email and SMS. If you are asked to pay a fee to release your super, it is likely to be fraudulent. The ATO is managing approval of all claims and there are no fees payable to get access to this scheme.
It is important to have a sound, long-term investment plan that will help you achieve your retirement goals. We appreciate the impact of events like these can be unsettling, and that everyone’s situation is different. You may want to seek financial advice to help you determine if this option is suitable for your personal circumstances.
As a State Super member, you and your family can access a range of services over the phone with a professional financial planner at StatePlus. Simply call 1800 620 305 to arrange an appointment.