"I am 53 years old and have ongoing medical bills from cancer treatment, on top of my mortgage. I would like to know whether I can access my superannuation early to help cover these costs and if so, what is involved."
- Question from Aadila in Burnie, TAS
Top answer provided by:
Patricia Soares Garcia
Hi Aadila,
I am so sorry to learn about the challenging situation you are facing with your cancer treatment and the expenses it entails. I can only imagine how tough this must be for you.
In terms of whether you can access your super early to help with your medical bills and mortgage repayments, the answer will really depend on your specific circumstances. I have tried to give you a summary below of some of the rules you should be aware of. As super is quite complex, I definitely recommend you seek professional financial advice. You may want to reach out to Cancer Council Australia as you may qualify for Pro Bono advice.
Early access to superannuation is generally only permitted in specific circumstances, such as severe financial hardship, compassionate grounds, or if you are permanently incapacitated and are unlikely to ever work again.
In your case, if you are experiencing severe financial hardship due to medical bills and mortgage repayments, you may be eligible to apply for early access to your superannuation.
To apply for early access on the grounds of severe financial hardship, you will need to meet certain eligibility criteria, such as:
-Receiving Commonwealth income support payments for a continuous period of 26 weeks
-Unable to meet reasonable and immediate family living expenses
As you are under your preservation age plus 39 weeks there are also restrictions as to the amount you can receive (the amount released from super in each 12-month period must be a single lump sum of not less than $1,000 and not more than $10,000).
I've addressed the basic rules around accessing your super via compassionate grounds below.
A person may apply to the Australian Taxation Office (ATO) on the grounds that funds are required for one of the following unpaid expenses:
1. medical treatment or medical transport for the person or a dependant, or
2. a payment on a loan to prevent foreclosure of a mortgage on the person’s principal place of residence, or
3. to modify the person’s principal place of residence, or vehicle, or accommodate the special needs of the person, or a dependant, arising from severe disability, or
4. expenses associated with the person’s palliative care, in the case of impending death, or
5. expenses associated with a dependant’s (including palliative care, in the case of impending death, death, funeral, or burial)
If the money is required for medical treatment, the person must provide the ATO with medical certificates from two registered medical practitioners (at least one of whom must be a specialist) certifying that the medical treatment is necessary to:
-treat a life-threatening illness or injury, or
-alleviate acute or chronic pain, or
-alleviate an acute or chronic mental disturbance, and
-the treatment is not readily available to the person, or the dependant, through the public health system.
The amount you can withdraw on compassionate grounds is limited to the amount reasonably needed to meet your expenses. You cannot withdraw more than what is necessary to cover your immediate needs.
Withdrawals on compassionate grounds are generally taxed differently than regular super withdrawals. The tax treatment will depend on your age and the amount you withdraw.
Keep in mind that early access to your superannuation should be a last resort, as it can affect your retirement savings. Before making any decisions please seek professional financial advice.
I hope is that this provides some assistance and that your circumstances improve soon. Wishing you a quick and complete recovery.
Disclaimer: It is important to note that any advice or information provided is for educational purposes only and should not be taken as professional financial advice. You should always seek the advice of a licensed financial advisor or a qualified professional before making any decisions related to your financial situation. Additionally, the information I provide may not be up to date or relevant to your specific circumstances, so it is important to verify any information and consider your own individual circumstances before making any financial decisions.
While the Adviser Ratings Website facilitates the question and answer functionality, all such communications are between users and authorised financial advisers, of which Adviser Ratings has no affiliation. Adviser Ratings is not the advice provider and does not provide financial product advice and only provides information that is general in nature.
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