Hi, I’m applying for early release of super on compassionate grounds for dental treatment. I understand that tax is withheld from the amount released. Am I allowed to apply for a higher amount so that, after tax is deducted, I still receive the full amount needed to cover the treatment cost? Or do I need to only apply for the exact treatment amount?
Hey @Csdenton24,
For compassionate release of super, we can only approve an amount that is reasonably required to cover the unpaid dental treatment costs, based on the evidence you provide (such as quotes or invoices). If tax applies, it’s withheld by your super fund before the payment is made.
The super you withdraw on compassionate grounds is paid and taxed as a normal super lump sum by your fund.
This means, even after tax is withheld and before your fund pays it to you, you'll still see the requested amount (as long as you have enough in your super account).
Best to check the balance to make sure there's currently enough to cover both the full treatment expense and the tax withholding amount.
Also check directly with your superfund. I wouldn't use your myGov account, as it may not have up to date balance recorded.
Yes - the ATO guidance that it is necessary to ensure you have sufficient in your super account to cover both the expense and the applicable tax.
Access on compassionate grounds – what you need to know | Australian Taxation Office
Super trustees must withhold tax on the taxable portion of the payment so you will only receive a net amount.
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