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Can I use my super funds if I get sick?


Laine Gordon

By Laine Gordon

3 min read

Normally, you can only access your hard-earned superannuation savings when you reach the your preservation age — which can range from 55 to 60 — or when you turn 65. But things don't always go to plan. What happens if you become seriously ill before then? 

As it happens, there are provisions under superannuation law to allow for Australians to access their super funds in case of illness. After all, what is superannuation if not a savings fund to aid you when you're most vulnerable — a state of affairs that doesn't necessarily come with retirement. 

There are two main medically related situations in which you can access your super early. Funds can be released early on compassionate grounds to pay for medical treatment and in cases of terminal illness. It's also possible to request early release in case of permanent incapacity, too. 

Medical treatment and palliative care

As the Department of Human Services (DHS) explains, you can use superannuation funds to pay medical treatment and transportation costs for you or your dependant, if suffering from: 

  • a life-threatening illness or injury
  • chronic mental illness 
  • chronic or acute pain

In this case, you also need to lack the financial capability to pay for the costs yourself, as well as not have insurance cover or assistance from the public health system. 

You'll need to provide documentation to the DHS in order to qualify for this early release. This includes: 

  • a report from a registered medical specialist and practitioner certifying the above considerations
  • quotes or unpaid invoices showing the amount required
  • if paying for a dependant, evidence of dependency 

Terminal illness

The other major medical reason you might need your super early is in case of terminal illness. In this case, you won't need to go through the DHS, but contact your super fund directly and ask for an early release of the money. 

A terminal illness, as stated by the Australian Taxation Office, is if two separate registered medical practitioners certify an individual is due to die within a year due to an illness or injury. At least one of these practitioners needs to be a specialist in the particular area the illness or injury is in. 

Payment of this benefit is typically made in a lump sum, so you can access the funds as early as possible. Withdrawing money is also tax-free. If your fund doesn't allow early release, then consider transferring to one that does and try again.

Permanent incapacity

if you permanently lose the ability to work due to some kind of illness or injury, then you can also request your super early. Similar to the conditions of terminal illness, you'll need to have written evidence from two medical practitioners certifying that you cannot ever again be gainfully employed, one of them being a specialist in the field of your injury. 

In all likelihood, these are issues which most of us will not have to worry about in our lives. However, it can't hurt to be familiar with this information just in case. 

To apply for the early release of some of your superannuation, and find out more information, visit the DHS website.

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