Some Covid-19 Early Release Clarification

Some Covid-19 Early Release Clarification

Here are some further clarifications of the Covid-19 early superannuation release measures;

  • They received Royal Assent on 24 March but are not active until 20 April.
  • Member’s wishing to withdraw under these provisions must make application to the ATO via the MyGov site. Expressions of interest can be made now but they will not be processed until after 20 April
  • No withdrawals may be made until the super fund receives the ATO’s authority. For SMSFs, that means the trustees must retain each member’s authority for audit purposes and any early release must have occurred after the authority was issued.
  • This early release measure is stand alone. It does not reduce a member’s entitlement to make an application under the Financial Hardship or Compassionate provisions.
  • Benefits released under this provision are not subject to taxation or assessed against government benefits. This differs from the treatment of early release benefits under Financial Hardship or Compassionate grounds.
  • A maximum of $10k may be withdrawn in this financial year and, again, in the next but only one application is allowed per year so an application for, say, $6k in this year would prevent a member from claiming the additional $4k later this year. A further $10k could be claimed next financial year.
  • Eligibility for sole traders includes partners in a partnership. We are awaiting clarification regarding the owners/employees of companies and trusts.