The recently introduced ‘COVID-19’ compassionate ground for the release of super enables a superannuation member to withdraw up to $10,000 in this financial year and $10,000 in the next financial year, if the ATO determines that COVID-19 withdrawal can be made based on criteria in the Superannuation Industry (Supervision) Regulations. If the ATO makes such a determination it MUST be adhered to by a super fund.
The period of time in which COVID-19 related applications for early release of super must be made to the ATO is limited. For the current financial year, the application must be made before the end of the year. For the next financial year, the application must be lodged within the 6 month period starting on the day the relevant regulation commences (ie within the 6 month period starting 26 March 2020). According to the ATO, the cut-off date for applications in relation to the next financial year is 24 September 2020.
The criteria for COVID-19 applications include unemployment, eligibility for a jobseeker payment or other government income support.
The ATO cannot make a determination that a COVID-19 withdrawal can be made in relation to a member if they have already made a COVID-19 related determination under either the Superannuation Industry (Supervision) Regulations or the Retirement Savings Account Regulations in the same financial year in relation to that member.
However, there is nothing in the law preventing a member seeking further or additional early releases of super under other grounds for release (subject to any limits on withdrawal amounts specified for other grounds of release), in particular:
Determinations under these other grounds of release allow a super fund to release super monies and are subject to a fund’s governing rules. A fund’s governing rules can be more restrictive.
Severe financial hardship applications require a super fund trustee to be satisfied about the inability of a person (who has not reached their preservation age) to meet reasonable and immediate family living expenses. How it does this is a matter for internal trustee policies and processes.
Governing rules and financial hardship application processes may, therefore, need some urgent re-consideration.
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