Consolidating superannuation funds
Back to top The amount you can access early on compassionate grounds depends on the balance of your account and the specific bills or debts you wish to pay.
For mortgages, DHS can authorise the release of a lump sum equivalent to three months mortgage payments plus 12 months interest on the outstanding mortgage balance.
Funds released on compassionate grounds may be included in your taxable income.
Back to top You should advise your mortgage lender (or other creditor if your request is for medical or funeral expenses) you have applied for release of superannuation funds and request that no debt enforcement action is commenced against you while your application is being processed.
DHS will assess your application within 10 days of receiving all required information and documentation.
It will advise you in writing of their decision on the release of your funds.
Even if you obtain approval from DHS, your superannuation fund is not obliged to release your superannuation funds early if their policy disallows early access.
You should only consider using superannuation after you’ve investigated all other debt management options, and preferably when you’ve received advice from a The short-term benefit of using your superannuation early needs to be weighed up against the longer term disadvantages of decreasing the funds that will be available to you in retirement.
For example, if you access your superannuation early to pay the arrears on you home loan in circumstances where you cannot afford your home in the long term, all you have done is prolonged the inevitable sale of your house.
You will have also taken funds that were originally protected from creditors (superannuation) to pay off debt where the funds lose their protection, and lost both your house and a portion of your superannuation.
You will have reduced the superannuation funds available to you in retirement or for another incident of financial hardship.
You may be required to pay tax on any superannuation released early.
Accessing your superannuation early to pay bills is a short-term response to buy temporary financial protection.