27 March 2020
Message from the Trustee
For the past few weeks, we have all been following the news closely and no doubt you will be aware that the Government recently passed legislation to assist persons experiencing financial difficulty due to the impacts of Coronavirus to access their superannuation.
The Trustee is working with its administrators to ensure that members are taken care of during this time. Some of the initiatives are outlined in summary below:
Early release of superannuation on compassionate grounds
The government has recently extended the grounds for compassionate release of superannuation to allow individuals who have been impacted by the adverse effects of the Coronavirus access up to $20,000 of their superannuation savings in two tax free lump sums.
- If you have been financially impacted by the coronavirus you may be able to access up to $10,000 of your super in 2019-20 financial year and a further amount of up to $10,000 in 2020-21 financial year. You will only be allowed to make one application per financial year.
- The changes will be in effect from 25 March 2020 and effected members will have until 25 September 2020 to apply to the ATO.
- If you are considering applying for an early release on compassionate grounds relating to the Coronavirus, you will need to apply through the myGov function on the Australian Taxation Office (ATO) website and eligibility will be based on satisfaction of any one or more of the following criteria:
− you are unemployed;
− you are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or
− on or after 1 January 2020:
- you were made redundant; or
- your working hours were reduced by 20 per cent or more; or
- if you are a sole trader – your business was suspended or there was a reduction in your turnover of 20 per cent or more.
- You will not need to pay tax on amounts released and the money withdrawn will not affect Centrelink or Veterans’ Affairs payments.
- Once the ATO has made a determination, it will write to you and also your super fund to release the funds.
- Some great tools for understanding current Treasury support and recent announcements including fact sheets and additional resources are:
If you have already applied for a payment from your superannuation account on the basis of compassionate grounds in the financial year, you will not be eligible to apply again.
It is important to be aware that your insurance cover may be cancelled if your superannuation account balance is insufficient to support the monthly deduction of insurance costs or if your balance falls below $6,000. Keeping your account balance over $6,000 and making regular contributions is one way of maintaining insurance cover in your super. You can also provide us with a written election to keep your insurance switched on. In any case, the Trustee will contact you before cancelling any insurance cover you may have.
Please note that if your superannuation is Defined Benefit in nature you will not be able to access your superannuation in this manner.
Providing support for retirees
The Government understands that within the current economic environment, there are implications also for retirees and as such, they are temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50 per cent for the 2019-20 and 2020-21 financial years.
The Government is also reducing both the upper and lower social security deeming rates by a further 0.25 percentage points in addition to the 0.5 percentage point reduction to both rates announced on 12 March 2020.
For more information please access the following government websites: moneysmart and Treasury.
Small business and other measures
The legislation also made other provisions for persons who have lost their jobs and are at risk of losing their businesses. For more information about these measures refer to the government website moneysmart.