Emergency money from your super fund

Emergency money from your superCompassionate reasons can serve as grounds for withdrawing pre-retirement or preserved super to cover medical and related emergencies – but strict rules apply.

Overseen by the Department of Human Services, the compassionate grounds benefit allows super to be withdrawn in one or more of five specific circumstances, after taking into account a member’s financial capacity.

The member of a superannuation fund seeking funds under the compassionate grounds benefit provisions must provide proof that without access to money from their super fund, the specific expense could not be met.

The trust deeds of the super fund, whether that fund is an SMSF or private or industry fund, must also permit the payment of this type of benefit.

The special circumstances warranting early release of money from the super fund apply where:

a member, or their dependant, requires medical or dental treatment. Certification is needed from two medical practitioners, including one specialist, that the treatment is essential to treat a life-threatening illness or injury, or to alleviate chronic pain or mental disturbance.

medical transport is required in order for the member or dependant to access the specified treatment. This also needs to be signed off by the same two medical practitioners.

it is needed to pay for a member’s palliative care, or the palliative care, death, funeral or burial costs of a member’s dependant.

home or car modifications are needed in the case of severe disability being suffered by the member or their dependant.

money is needed for mortgage repayments to prevent the forced sale of a home. Proof is required in the form of official notification from the lender that foreclosure is imminent. A maximum of three months’ mortgage repayments and 12 months’ interest on the outstanding loan balance can be made available.

Any tax payable will depend on the components of the benefits released, and may be tax-free if you are over preservation age. Release due to terminal illness has no age requirement and is tax-free. Check with your advisor for personalised advice.



This post was last modified: Nov 11, 2012 @ 8:20 am

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