The temporary access to our superannuation funds is aimed to offset the economic stress that COVID-19 is putting Australians through.
This means, if you’re eligible, you can apply for an early release of up to $10,000 in the 2019-20 financial year through the myGov website. More super opportunities are available from July 2020, too.
However, with other financial assistance already in place from the Australian Government, is cashing in on your super early really worth it?
Read more from your Gold Coast Accountant Crest Accountants to discover the benefits and warnings of accessing your superannuation early.
Are you eligible for early access to your superannuation?
Cashing in on your super may be that breath of relief you were looking if you found yourself out of a job due to COVID-19. In times of economic anxiety and financial stress – financial assistance from the Australian and State Governments really stepped in!
If you meet one or more of these criteria, you’re eligible to apply for early access:
- You’re unemployed,
- You’re eligible to receive a JobSeeker Payment, youth allowance for jobseekers, parenting payments (both single and partnered payments),
- On or after January 1st, 2020:
- You were made redundant,
- Your working hours were reduced by 20% or more, and
- As a sole trader, your business was suspended, or turnover reduced by 20% or more.
Your super is your money, and you have a right to access your own money. Yet, the hole in your super and retirement savings, when this is all over, will also be your money (something to think about).
What are the warnings against early superannuation access?
Early access to your super isn’t entirely the best option for your long-term financial situation.
Some of the warnings:
- Potential for tax arbitrage (profiting from the differences that arise from the ways transactions are treated for tax purposes).
- You’re essentially chipping away at your retirement nest egg by accessing your super early.
Explore your options with a Gold Coast Accountant
It’s important to remember the reason early access of superannuation was allowed: for compassionate reasons.
To stay on the tax-compliant and financially-wise side, it’s imperative to discuss your options with a Gold Coast Accountant.
Crest Accountants have assisted individuals, families and businesses for over 45 years with:
- Tax Returns,
- Asset Protection,
- Estate Planning,
- Business Structuring and Tax Returns, and more.
Many Australians currently are (or will soon be) facing severe financial hardship because of recession – our first recession in 29 years.
Before making any decisions though, it’s important to explore other financial options and consider early access as a last resort.
Whatever your employment situation or stage of life, advice from a Gold Coast Accountant will help you understand your options, putting you in the best possible situation for your finances now and in the future.
Need help exploring your options throughout this time of difficulty and uncertainty?
We’re here for you – Contact Crest Accountants today for a personalised accounting service, just for you.
Disclaimer: The information contained in this news post is general in nature and is intended to provide a general summary only and should not be relied on as a substitute for professional advice.