In recent years we've seen a continuing increase in the number of applications for Early access to superannuation on compassionate grounds. Although there has been a slight decline in applications this year, the total value approved increased to a record $1.46 billion.
Compassionate release of super is available only in limited circumstances. It should be viewed as a last resort, when all other options have been exhausted. Members may not fully understand the financial consequences of accessing their super early - now and in the future. They may not be aware of the tax withheld from payments, fees and the impact on their insurance and retirement savings.
Super Funds play an important role in helping members make informed decisions and ensuring they understand there are consequences for people who deliberately submit false, misleading or fraudulent applications.
We're asking funds to encourage members to contact their fund before making a CRS application to confirm:
- how much tax may be withheld
- whether fees may apply
- that there is enough money in their super account to cover both the expense and any tax they will need to pay
- whether the withdrawal could affect any insurance cover held through their super account.
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