Early release of superannuation on compassionate grounds

Note: Compassionate grounds are different from financial hardship and from experiencing a terminal medical condition which are also grounds for early access to superannuation.

Before applying for compassionate release, the member must consider if there are other alternatives to access their superannuation early which may be less onerous to use. An example may be accessing a transition to retirement pension or verifying if they have 'retired' so they can access their superannuation directly. This paper does not consider the alternatives as they are dependent on each member's specific situation.

What is early release of superannuation on compassionate grounds?

Superannuation is locked away until a condition of release is met which allows a member to be able to access their funds. The most common condition of release is turning 65 and thus achieving what is known as pension age-this is different from the Centrelink definition of pension age. One of the other ways a member may be able to access superannuation is known as compassionate grounds. Under specific circumstances a member can pay for certain types of expenses from their superannuation fund. The circumstances are limited and may extend to their dependants.

A dependant can include a spouse or child as well as a person that has an interdependent relationship with or is financially dependent on the member. Most family situations with Mum and Dad and two children usually fit within the definition of a dependant.

Who can authorise the release on compassionate grounds?

The ATO must authorise the claim for release before it can be paid from a superannuation account. If the member is with an industry or retail superannuation fund, they need to go directly to their superannuation fund and through their [fund's] processes to release their superannuation. When attempting to access superannuation on compassionate grounds via an SMSF the member needs to submit their application directly to the ATO explaining the situation.