From 1 July 2018, responsibility for the administration of the early release of superannuation benefits on compassionate grounds will be transferred from the Department of Human Services (DHS) to the ATO.
Superannuation benefits can be released on compassionate grounds to meet expenses related to medical treatment, medical transport, modifications necessary for the family home or motor vehicles due to severe disability, and palliative care. Funds may also be released on compassionate grounds to prevent foreclosure of a mortgage or exercise of a power of sale over the fund member’s home (principal place of residence); or to pay for expenses with a dependant’s death, funeral or burial.
Early access to super needs to be a last resort. It’s up to the person applying for early access to prove to the regulator that they don’t have the financial capacity to meet these expenses without access their superannuation.
A key improvement under the new process is the ATO providing electronic copies of approval letters to superannuation funds at the same time as to the applicant, which will mitigate fraud risk and negate the need for superannuation funds to independently verify the letter with the Regulator.
Individuals will also upload accompanying documentation simultaneously with their application, rather than the current ‘two-step process’.
Since DHS will accept early release applications up until 30 June 2018, there will be a short transition period where DHS will continue to process those existing applications and complete any necessary reviews.
Nonetheless, from 1 July 2018 the ATO will process all new applications and it is expected that the regulation of early release of super will be more stringently governed than previously.
More information? To find out more, give us a call on 1300 023 782 or email firstname.lastname@example.org.
Latest posts by Craig Dangar (see all)
- Transferring Property Prior to Bankruptcy - April 5, 2020
- Distinct Lack of COVID-19 Support for Sole Traders - April 3, 2020
- The Power of the ATO During an Insolvency - April 2, 2020
- Putting Your Business into Hibernation - March 30, 2020