Natural disasters and access to superannuation

By Olivia Long, on behalf of Firstlinks
January 2020

The impact of Australia’s ongoing bushfire crisis is devastating. Not only are Australians losing their homes and entire belongings, but many are also hit by the loss of their business or means to generate an income. They may be in urgent need of cash as a result, and charitable and government support will be limited.

In the first instance, people impacted may be entitled to a disaster recovery payment and should contact Centrelink.

The disaster recovery allowance is a short-term payment to help anybody if a declared disaster directly affects their income. You can access it for a maximum of 13 weeks and is payable from the date you lose income as a direct result of the bushfires.

How does early access work?

Whilst the Australian Taxation Office (ATO) does allow for early access to superannuation under compassionate grounds or for those suffering ‘severe financial hardship’, it is recommended access to super remains a last resort to those in need. This is due to the nature of superannuation and its intended use to ‘provide an income upon retirement’. It may also be difficult to put money back into super after it is taken out.

Members of SMSFs and large super funds, however, may try to access their superannuation due to severe financial hardship in addition to the disaster recovery payment.

A super withdrawal due to severe financial hardship is paid and taxed as a super lump sum. The minimum amount is $1,000 (unless a super balance is less than $1,000) and the maximum amount is $10,000.

Superannuation members can only make one withdrawal because of severe financial hardship in any 12-month period.

Another option available to those eligible is to commence a transition to retirement pension, called a TRIS. It allows access to super without having to retire or leave a job. A TRIS permits super members to draw down a maximum of 10% of their super account balance during a financial year which can be used to fund expenses. In an SMSF, funds are accessible immediately.

To be eligible, a member must have reached their preservation age (if another condition of release has not been attained). For those born before 1 July 1960, the preservation age is 55, but the age increases for those born after that date. For more details, see the ATO website.

Sympathetic judgement needed

Given the magnitude of the devastation caused by the bushfires, the Federal Government should allow early access to super to assist those impacted during these horrific times.

Anybody considering an application for early release can contact the ATO on 13 11 42 to discuss their situation. Eligible Australians impacted by bushfires can make a claim by calling 1800 806 218.

This article first appeared on


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