COVID-19: Things to consider regarding early release of super
The Government has introduced a package of measures to provide assistance to eligible individuals financially impacted by the Coronavirus (COVID-19) including the temporary early release of super. This is a single payment of up to $10,000 in both the 2019/2020 and 2020/2021 financial years.
Here are some points to consider before applying to release your super:
Is there a sufficient amount in the cash account?
If you do not have sufficient cash in your account to cover the withdrawal amount, your super fund will trigger a drawdown based on your existing default strategy. This may delay the payment of the withdrawal to you. It may also mean you lock in losses on investments that may have lower values currently than they normally would.
Do you have an insurance policy?
If the early release payment doesn't leave a sufficient amount in the account to cover insurance premiums, your policy may be at risk of
Are you intending to claim a tax deduction for personal contributions?
If you were intending to claim a tax deduction for some of the personal contributions made to your account during the current or previous financial year, you may need to lodge a 'Notice of intent to claim or vary a deduction for personal super contributions' form to confirm your intent to claim a tax deduction for those contributions, before the early release payment is processed.
If the redemption request is received from the ATO and actioned prior to receipt of this intent to deduct notice, you may not be able to claim a deduction for some or all of the contributions that have been made.
If you are considering applying to release your super under these measures, we strongly urge you to talk to us first. There may be other options that are more appropriate or better suit your circumstances.