ATO tips for Aussies considering accessing their super early

ATO tips for Aussies considering accessing their super early

Have you been hit hard financially by the economic impacts of COVID-19? You may be considering joining the millions of Australians who have dipped into their super to get them through this rough time.

The latest figures from the Australian Taxation Office (ATO) released to RateCity show that 2.57 million unique applications for early super release have been approved, totalling $30.2 billion. 

This equates to an average amount of $11,750 being withdrawn per person.

The government initially capped the total that could be withdrawn at $10,000 but has allowed for repeat requests as of this new financial year.  

If you’re looking to dip into your super for financial support, the ATO's Assistant Commissioner Sonia Corsini has some handy tips that you may want to know before you begin your application.

Top tips from the ATO for early super withdrawal

1. Are you eligible for early super withdrawal?

It's clearly important to make sure you can withdraw your super, and if you're looking to this approach, it might be time to get some reading done and dusted.

"The eligibility criteria is outlined on our website," said Ms Corsini. It’s really important that you carefully read the criteria and only apply if you meet it. If you’re not sure, ask your tax professional or financial advisor for advice about eligibility and whether accessing your super is the right decision for you. If you’re a temporary resident, you are not eligible to apply from 1 July 2020." 

 2. Is your record keeping in order? 

You may not think those records matter, but financial details could be everything when it comes to having the ATO approve your application.

"We don’t ask you to include supporting evidence when you submit your application, but you should keep good records to support your application. For example, payslips or bank statements or letters of dismissal from your employer," said Ms Corsini.

"We might ask you to explain how you assessed your eligibility and provide evidence to us. If you are unable to demonstrate your eligibility, we may revoke the determination that we issued in respect to your application. That means that any money you withdrew from super will be taxable and you’ll need to include it in your tax return. In addition to this, we may apply financial penalties for the most serious cases.

"If you think you may have done the wrong thing, it is much better to come forward to make a voluntary disclosure than to wait to be audited. If in doubt on how to proceed, we recommend seeking the advice of a tax professional. We know people make mistakes so we will work with you to help to remedy your position" said Ms Corsini.

3. Have you linked to ATO on myGov?

"You’ll need to be linked to the ATO on myGov in order to apply. If you aren’t already linked to the ATO on myGov, follow the instructions at," she said.

These days, everything is to an online presence, and there's no exception here. Make sure your myGov is connected to the ATO, otherwise you might be in for a hard time. 

4. Take your time and please be patient

Even if you've decided that yes, you'll be getting money out from super, Ms Corsini advises taking your time to ensure all the details are right. 

"Take your time with your application, and don’t rush! Mistakes can slow your application and payment down unnecessarily. Double check details like your bank account details and make sure they are correct before submitting," she said. 

"And once you have lodged your application, please be patient. It’s a busy time but we are working as hard as we can to process applications quickly and we know the funds are processing payments as quickly as they can" said Ms Corsini.

5. Watch out for scammers! 

And finally, while you're being careful about details, make sure to be cautious about anyone asking to go through the work for you. Scammers are about and will happily take your money if you let them, and we doubt you'd want that to happen.

"Applying for early access to your superannuation under the COVID19 scheme is a free service. You do not need to pay someone to do it for you. If you receive a text message or e-mail stating that your myGov details have been changed, or that you have applied for early release of super and you have not, don’t ignore these messages: check your myGov, call the ATO and your super fund to make sure your identity has not been compromised."

"But don’t click on any links – one technique used by scammers to steal your information is to mock-up messages which appear to be from the ATO. To see how to identity and report a suspected scam, head to" said Ms Corsini.

  • Keep in mind that superannuation is there to support you in retirement. Raiding your nest egg may make a serious dent in your final balance - a $20k dent if you're not careful. 

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Learn more about superannuation

What is superannuation?

Superannuation is money set aside for your retirement. This money is automatically paid into your superannuation fund by your employer.

What happens if my employer falls behind on my superannuation payments?

The Australian Taxation Office will investigate if your employer falls behind on your superannuation payments or doesn’t pay at all. You can report your employer with this online tool.

What is the superannuation rate?

The superannuation rate, or guarantee rate, is the percentage of your salary that your employer must pay into your superannuation fund. The superannuation guarantee has been set at 9.5 per cent since the 2014-15 financial year. It is scheduled to rise to 10.0 per cent in 2021-22, 10.5 per cent in 2022-23, 11.0 per cent in 2023-24, 11.5 per cent in 2024-25 and 12.0 per cent in 2025-26.

What are the risks and challenges of an SMSF?

  • SMSFs have high set-up and running costs
  • They come with complicated compliance obligations
  • It takes a lot of time to research investment options
  • It can be difficult to make such big financial decisions

How do you find lost superannuation funds?

Lost superannuation refers to savings in an account that you’ve forgotten about. This can happen if you’ve opened several different accounts over the years while moving from job to job.

You can use your MyGov account to see details of all your superannuation accounts, including any you might have forgotten. Alternatively, you can fill in a ‘Searching for lost super’ form and send it to the Australian Taxation Office, which will then search on your behalf.

Can I buy a house with my superannuation?

First home buyers are the only people who can use their superannuation to buy a property. The federal government has created the First Home Super Saver Scheme to help first home buyers save for a deposit. First home buyers can make voluntary contributions of up to $15,000 per year, and $30,000 in total, to their superannuation account. These contributions are taxed at 15 per cent, along with deemed earnings. Withdrawals are taxed at marginal tax rates minus a tax offset of 30 percentage points.

Voluntary contributions to the First Home Super Saver Scheme are not exempt from the $25,000 annual limit on concessional contributions. So if you pay $15,000 per year into the First Home Super Saver Scheme, you have to make sure that you don’t receive more than $10,000 in superannuation payments from your employer and any salary sacrificing.

What are concessional contributions?

Concessional contributions are pre-tax payments into your superannuation account. The payments made by your employer are concessional payments. You can also make concessional contributions with a salary sacrifice.

How does superannuation affect the age pension?

Most Australians who are of retirement age can qualify for the age pension. However, depending on the size of your assets and post-retirement income, you might be entitled to only a reduced pension. In some instances, you might not be entitled to any pension payments.

How much superannuation do I need?

According to the Association of Superannuation Funds of Australia (ASFA), here is how much you would be able to spend per week during retirement:

Lifestyle Singles Couples
Modest $465 $668
Comfortable $837 $1,150

Here is the superannuation balance you would need to fund that level of spending:

Lifestyle Singles Couples
Modest $50,000 $35,000
Comfortable $545,000 $640,000

These figures come from the March 2017 edition of the ASFA Retirement Standard.

The reason people on modest lifestyles need so much less money is because they qualify for a far bigger age pension.

Here is how ASFA defines retirement lifestyles:

Category Comfortable Modest Age pension
Holidays One annual holiday in Australia One or two short breaks in Australia near where you live Shorter breaks or day trips in your own city
Eating out Regularly eat out at restaurants. Good range and quality of food Infrequently eat out at restaurants. Cheaper and less food Only club special meals or inexpensive takeaway
Car Owning a reasonable car Owning an older, less reliable car No car – or, if you do, a struggle to afford the upkeep
Alcohol Bottled wine Casked wine Homebrew beer or no alcohol
Clothing Good clothes Reasonable clothes Basic clothes
Hair Regular haircuts at a good hairdresser Regular haircuts at a basic salon Less frequent haircuts or getting a friend to do it
Leisure A range of regular leisure activities One paid leisure activity, infrequently Free or low-cost leisure activities
Electronics A range of electronic equipment Not much scope to run an air conditioner Less heating in winter
Maintenance Replace kitchen and bathroom over 20 years No budget for home improvements. Can do repairs, but can’t replace kitchen or bathroom No budget to fix home problems like a leaky roof
Insurance Private health insurance Private health insurance No private health insurance

What are reportable employer superannuation contributions?

Reportable employer superannuation contributions are special contributions that an employer makes on top of the regular compulsory contributions. One example would be contributions made as part of a salary sacrifice arrangement.

Who can open a superannuation account?

Superannuation accounts can be opened by Australians, permanent residents and temporary residents. You’re automatically entitled to superannuation if:

  • You’re over 18 and earn more than $450 before tax in a calendar month
  • You’re under 18, you work more than 30 hours per week and you earn more than $450 before tax in a calendar month

What is the difference between accumulation and defined benefit funds?

A majority of Australians are in accumulation funds. These funds grow according to the amount of money invested and the return on that money.

A minority of Australians are in defined benefit funds – many of which are now closed to new members. These funds give payouts according to specific rules, such as how long the worker has been with their employer and their final salary before they retired.

How do I change my superannuation fund?

Changing superannuation funds is a common and straightforward process. You can do it through your MyGov account or by filling out a rollover form and sending it to your new fund. You’ll also have to provide proof of identity.

How does the age pension work?

Most Australians who are of retirement age can qualify for the age pension. However, depending on the size of your assets and post-retirement income, you might be entitled to only a reduced pension. In some instances, you might not be entitled to any pension payments.