7 Ways to Quickly Access Your Super Claim and Minimize Expense
Superannuation or simply “super” is money that is set aside by an employee during his or her employment period. It is mostly used as a retirement investment plan where money saved is meant for use later during retirement life. The primary purpose of superannuation funds is to have a pool of money on which you can survive when you are no longer working.
The more money you have in your account, the more you will have access to after retirement. In many cases, the employer is supposed to set a fraction of the employees’ payment as allocation for a super account. That super account must be opened in the name of the employee and managed as a super fund.
In Australia, the current formula used requires the employer to commit 9.5 percent of the income to the super fund. This is a demand by the law, and therefore, every employer is supposed to commit themselves.
Employees are not stopped from adding money to the super account in case they need to have a large pool of funds they can depend on upon retirement. For self-employed people, they are also allowed to have superannuation accounts in which they can choose how much they would like to save.
To ensure that the funds are used for the proper purpose, the government has placed restrictions on how these funds can be accessed. In many cases, these funds are only accessible after retirement although this can be altered depending on the agreement between the employee, the employer, and the regulatory bodies.
For those who retire at the age of 60, they can retire knowing that they have a regular income stream to help them live a comfortable life and one that is free of taxes.
For you to access super funds that are tax-free, you must wait until you attain the retirement age of 60 years. However, we all know that in some cases people are forced to take early retirement which begs the question of whether they should still wait for the 60 years to elapse.
For those who retire at the age of 60, they can retire knowing that they have a regular income stream to help them live a comfortable life and one that is free of taxes. The money can be paid out in small amounts given out on a monthly basis or taken out as a lump sum. If you are an employee, you should ensure that you have asked your employer to provide information on the availability of a super fund in the organization.
As a general rule, funds in a super account can only be accessed at retirement. However, you might be tempted to ask yourself whether in case you face hard times financially you can have access to these funds. The most conditions under which funds in a super account might be released include a retirement, attainment of preservation age, reached 65 years even though you have not retired, and passing away. In case of death, funds in a super account are released to the beneficiaries.
Some cases can warrant superannuation savings to be released before the above conditions are met. Some of the common reasons that could lead to access to super savings include compassionate grounds, temporary or permanent incapacity, terminal medical condition, a super balance of less than $200, severe financial hardship, and in cases where one is changing citizenship for good. In this article, we’ll look at these cases that might warrant access to your superannuation savings.
Compassionate grounds
If the Department of Human Services is satisfied that you deserve access to your a super account on compassionate grounds, you will have access to your funds, but you will be taxed in the same manner a super lump amount would be taxed. It is important to note that funds released on compassionate grounds are meant to cover unpaid costs.
If you do not have unpaid cost, then it is highly likely that you will not access your super. Some of the cases that might guarantee access through compassionate grounds include medical challenges, an unpaid mortgage, disability or funeral.
Financial hardship
If you can prove that indeed you are facing a financial crisis, you might be given access to your super. In most cases, two factors are considered if you are to get access on the basis of financial hardship.
If you have access to government income continuously for 26 weeks but still unable to meet your family expenses reasonably, you might be allowed access. You might also be allowed access if you prove that you cannot manage to pay for your expenses in any other way apart from using the super funds.
Terminal condition
If you have been diagnosed with a terminal illness, you can contact your super fund manager so that you can be allowed to access the funds. For you to be granted access under a terminal medical condition, you must possess reports by two medical practitioners agreeing that you are unlikely to live for more than 24 months.
One of the practitioners must be a specialist for the condition you are suffering from. Your super on the grounds of medical conditions is available for withdrawal as a lump sum upon approval of your request. This income is not taxable.
Temporary and permanent incapacity
If you are suffering from any mental or physical condition that leaves you either temporarily or permanently incapacitated and therefore unable to work or provide for your family, you are allowed to seek permission to access your super fund. In the case of temporary incapacitation, you are allowed to access the funds but only as small regular payments.
In the case of permanent incapacity, the funds can be released as a lump sum or an income stream. For such a plea to be granted, you must have certification from two medical practitioners supporting the argument that you can no longer work.
A super balance of less than $200
If you are changing jobs and your current super account with the current employer contains less than $200, you can ask for your super. Under such a condition, the funds are not subjected to taxation, and the full amount is available for withdrawal as a lump sum.
Changing citizenship
If you are a resident of Australia and you would like to relocate to another country, you are required to ask for your super. The funds are however available after you have moved to the other country.
The preservation age
The age at which you are eligible to access your super is known as preservation age. The preservation age is normally counted based on when one was born. Aligning your plans with the preservation age can help you to deal with some of the hardships that can occur after your funds are eligible for withdrawal.
This funds can also be used to you access insurance options in the face of unexpected hardship. Seeking advice from financial experts with the understating of the Brisbane Superannuation Lawyers Murphy’s Law can help you to access your claim with ease.
Category: Retirement
