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Should I access my super early during the Coronavirus?

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If you’re adversely financially affected by COVID-19, such as lost work or being redundant, you may be eligible to access some of your superannuation early. For those people who are eligible, they could access up to $20,000 form their superannuation early, which includes up to $10,000 before 30 June and another $10,000 before 30 December 2020. But if you didn’t withdraw money in the first round, you can only withdraw a maximum of $10,000 in the second round.

As a matter of fact, nearly half a million Australians have applied to access their superannuation early, taking out nearly $4bn, as a result of the coronavirus pandemic. While accessing your super may be able to provide short term financial relief, but should you? For those considering doing the same, it’s important to understand the whole idea –  how does it work and what are the risks. Hopefully, this article will provide enough information to help you make an informed decision.

Who is eligible to access super early?

For Australian and New Zealand citizens

Citizens and permanent resident of Australia and New Zealand need to meet any of the following criteria:

    • you are unemployed
    • you are eligible to receive one of the following
      • JobSeeker payment
      • Youth Allowance for job seekers (unless you are undertaking full-time study or are a new apprentice)
      • Parenting payment (which includes the single and partnered payments)
      • Special Benefit
      • Farm Household Allowance
    • on or after 1 January 2020 either
      • you were made redundant
      • your working hours were reduced by 20% or more (including to zero)
      • you were a sole trader and your business was suspended or there was a reduction in turnover of 20% or more (partners in a partnership are not eligible unless the partner satisfies any other of the eligibility)

Temporary residents

Temporary residents are not eligible to apply for a COVID-19 early release of super in the 2020/21 financial year. If your visa has expired and you have left Australia, you may be eligible for the Departing Australia superannuation payment (DASP).

How can I apply?

Applications will be lodged through myGov website. You should log into your myGov account and select the options to register your interest for early access to super, and complete the application and address how much you’d like to withdraw. The ATO will access your application and advise you the fund release if you pass the eligibility criteria. As mentioned above, the government has announced they will extend the application period to 31 December 2020 for the second round.

Should I access my super early?

Superannuation is a compulsory payment made by your employer on top of your salary, contributing to your retirement fund, and your fund invests the money for you, with some of the money in the stock market and some in other various investments. The idea is to grow your retirement fund over time with the compound interest and wise investment choices, making sure you have a comfortable life after retirement. So, normally you are not allowed to access your super until you turn 60.

The new scheme is there to provide financial relief to help those who have been significantly financially affected by Coronavirus. That is to say, accessing your super is completely voluntary. You should only do it if you feel it’s necessary. However, it’s recommended to consider how it may impact your life and finances in the long term as there are also significant risks along with the benefits.


Accessing your super may be able to help you stay on top of your bills and repayments if you’re in severe financial hardship. Once you have that money, it can be used for anything and any purpose. You can use for rent, for essentials or for debts, and you can also add it back into your super via a voluntary contribution if you realize you don’t need the money anymore. Moreover, Super early access is tax-free while usually you get taxed on your super when you take it out at retirement.

Potential risks:

The most important factor you need to consider is the potential impact of this early supper withdraw on your retirement. By accessing some of the funds now, you’re actually taking the money away for yourself in the future. Since the super is a compounded investment over the long term, it’s worth considering that withdrawing some super now will not be to reduce your super by the amount you withdraw, there may be worth several times of the $10,000 today by the time you retire.  To be more specific, the problem with taking out your super now is that you lose out on the potential interest and investment gains in the long term.

Besides, another potential downside associated with accessing some of your super now is that over the past few months investment markets have fallen due to uncertainty around the economic impact of COVID-19, which means, your super fund may need to sell some of the assets on your behalf in order to let you withdraw the super, resulting from the loss of capital, and you also lose the opportunity to grow the capital value when the stock market recovers. The last possible consequence of withdrawing super early is how the insurance inside your super will be affected.

If you’re facing financial difficulties due to Coronavirus, we as a financial expert recommend you to be aware of all your possible options. If you’re unsure about whether this is a good decision for you to access the super early, you should seek the advice from a trusted expert to help you decide if the action is right for you.