Superannuation is complex.
How many of us check our super regularly? How many of us ensure our employers are paying the minimum 9.5 percent contributions every pay cycle? And how many of us are on top of keeping our retirement funds all in the same place? (When more than 43 percent of Australians have more than one super account, we're thinking not many.)
What we do know is that our superannuation fund is a stepping stone to retirement so when we leave the workforce, we can still maintain our lifestyle.
But what happens if we're faced with a terminal illness, the sudden death of a loved one or the prospect of losing our home?
Under certain conditions, we are eligible to access our retirement fund prior to reaching our preservation age (the age a person can access their superannuation).
The release of funds is usually up to the discretion of the superannuation trustee -- a group of people in charge of the super fund -- so when, and under what circumstances, can we access our money?
Meet compassionate grounds
The compassionate grounds category covers medical treatment for life-threatening illnesses, pending repossession of a person's home, or costs for modifying a home or vehicle for a person suffering severe disability. Funeral costs for a dependent are also covered under this category.
According to Riley Abbott, a superannuation and retirement financial adviser, an updated will is key to accessing superannuation funds for a funeral.
"You can't take your own money out for someone else's funeral -- if they have passed away, you can access their funds but the beneficiaries need to be up to date and the will needs to specify who the money can go to and that the money must be released as soon as possible," Abbott told HuffPost Australia.
"You also have to stipulate what you need those funds for -- I don't think you can just say you need it and then go to the pokies or on a holiday. You'll have to go to a funeral home and have it all sorted out with quotes or receipts."
Time frame is number one and compassion is number two -- there's no point holding back money for a terminally ill patient.
Approval on compassionate grounds claims, however, depends on personal circumstances.
"If you have children, are actively seeking work but you're about to lose your house and end up homeless, it's going to be hard for a fund to say no to helping you," Abbott said.
"With dependents, funds are usually more compassionate, without dependents, they'll usually look at other financial options before you immediately withdraw your super. It's on a case-by-case basis."
Under these circumstances $10,000 is the maximum withdrawal amount per person, per year.
Facing severe financial hardship
Severe financial hardship refers to being unable to pay bills, unable to afford immediate everyday living expenses and relying on Centrelink payments for more than 26 weeks. In these circumstances you can apply for early release of superannuation.
If you're in financial dire straights, super funds also require evidence of overdue notices.
In these circumstances, Abbott suggests contacting a financial adviser as soon as possible to request a freeze on interest payments or loan and mortgage repayments.
"Depending on the loan, banks might say they can freeze the loan or the payments for say, three months -- at the end of that they'll go back to the client to find out where you're at either to apply for another extension, reduce payments or re-finance," Abbott said.
Suffering terminal illness
Cath Sharples-Rushbrooke, Certified Financial Planner at Advice Services Australia told HuffPost Australia that a person who has been diagnosed with a terminal medical condition is able to access their super benefits providing at least two registered medical practitioners certify the person suffers from an illness likely to result in death.
"At least one of the practitioners must be a specialist practicing in an area related to the illness or injury suffered by the person and the person can receive these payments either as a lump sum, or an income stream depending on their needs," Sharples-Rushbrooke said.
However, Sharples-Rushbrooke also explains care needs to be taken for insurance reasons as many super funds require a minimum balance to be retained within the fund in order to keep the insurance.
Is there a time lag?
According to Abbott, super funds will put priority on releasing money to a person suffering a life-threatening illness, but it all comes down to communication with the fund, the bank and a financial adviser.
"In these circumstances we try and keep the clients out of it as much as possible -- it's our job to take all the stress away from them so we liaise with the super company and communicate with the fund -- the more they know, the more information they can give back to us and that generally goes through within a couple of weeks," Abbott said.
"Time frame is number one and compassion is number two -- there's no point holding back money for a terminally ill patient."
What if I need expensive treatment for a non-life threatening illness?
While the release of money is down to the decision of the trustee of the super fund, there are circumstances in which a person requiring expensive medical treatment can apply to withdraw their superannuation.
Abbott explains that while the general rule is no, if the trustee believes they can potentially save someone's life by releasing money, they're more likely to allow fund withdrawal.
"As a general rule they won't do it and cosmetic surgery is a flat out no, but in saying that if the doctor says the illness is treatable but the client doesn't have the money to pay for the treatment, they're likely to get worse down the track where it will turn into a terminal illness," Abbott said.
"In these circumstances, the trustee will use discretion to determine if you can receive your money early."
Have less than $200 in superannuation funds
While this doesn't seem like a lot and you might be thinking you should have received more than this from your employer, this generally occurs if you have ended employment earlier than expected, or have lost superannuation sitting in hold with the government. You may also find an account with less than $200 if you are in the process of combining your super funds.
So, why can we withdraw this amount and under what circumstances?
"Because it's such a small amount, over time fees are going to eat up that amount anyway so there would be no point of actually leaving it in," Abbott said.
So shouldn't we be able to withdraw $205 or $250 as well?
According to Sharples-Rushbrooke, the reason $200 is the withdrawal limit is related to tax.
"A benefit paid under this condition of release is tax free provided that it is less than $200 and is paid in its entirety as a lump sum -- any more than this and there are tax implications involved."
You're on a temporary working visa and are leaving Australia permanently
Another way to access your super before you pack up, leave the workforce and leave the country is by claiming your superannuation from a working holiday stint.
Departing temporary residents (not permanent residents, New Zealand citizens or Australian citizens) may be able to access their benefits when they permanently depart Australia by receiving a Departing Australia Super Payment.
According to Abbott, the key word is permanently.
"In your mind you have to never be going to return to the country to work again and the trustee of the fund will ensure your plans are never to return to the country again to live and work," Abbott said.
If the benefit has not been claimed within six months of departing Australia, the money is transferred into a no-interest account with the ATO.
Does this mean you can never come back to Australia to work?
"Ten years down the track if you decided you really wanted to move back here to work, there's not really a lot the super funds can do to recoup that cost, it's the trustees discretion to let it go -- once it's let go, it's let go, they can't chase you down for it," Abbott said.
"I think that would be a bit of a legal mine field if your super fund tried to ban someone from re-entering the country on those grounds."
While you may face challenges, the general advice is to roll your super over to a new super fund when you leave Australia to ensure you have work flexibility and your money doesn't end up in a lost super funds government account.
If you think you might be eligible for an early release of superannuation, Sharples-Rushbrooke recommends speaking with a certified financial adviser to seek guidance before attempting to access your super benefits.
Why is this?
"A financial adviser's guidance can add real value. Many super funds have relationships with financial advisers who understand the ins and outs of their specific super fund," Sharples Rushbrooke said.
"It may be worth asking your super fund if they have a relationship with someone who can provide you with personal advice."
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