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andersdeb(I'm new)I'm new
27 Jan 2025

Hello, I'm hoping someone could help me with these questions...(As I'm starting to panic!)

I have received approx $40K on compassionate release grounds for medical procedures. My Super fund explained 22% will be taxed from this amount but the whole $40K was put into my account. Do I need to pay $9600 to the ATO now? I can not work as I'm on a carers pension for adult son that is on a disability pension so hence my only income is approx $39K through centrelink. I also have a HEX debt of $35K which I have just realised the compassionate release of super will make my income higher so that will be another debt for me. My question is.... Will i receive any of this $9600 back when I lodge my tax return?

As you can see I have a very low income at the moment. My dream would be to work full time like normal people but its very unfortunate I'm in a situation that does not allow me. I am a single mum living alone with my 21yr old autistic child that is unable to work.

Any suggestions on how I can reduce this tax and hex bill, I'd be very grateful for any advice...

Thank you

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690 views
2 replies

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Most helpful reply

BroncosvRabbits(Devotee)Devotee
27 Jan 2025

Hi @andersdeb,


No, you don't have to pay anything to the ATO right here right now, in regards to the Compassionate release of super.


The superfund has confused you perhaps!


If you got all of what you asked for (which is what usually happens with this release), that means you had enough money left in your superfund to cover the 22% tax that's taken out of what's left in there.


For example, you have $50,000 in your superfund, you ask for and get $40,000, the tax will then come out of the $10,000 left in your superfund.


However, yes, you will have to declare that 40+k in your tax return when you lodge, which will push you up into another tax bracket of 30c for all amounts over $45,001.


No, you don't get to claim the tax back in your tax return as you don't have to pay it yourself.


Any early release of super (amounts taken out mostly before 65yrs), are taxed by the superfunds as a penalty/deterrent for using something that's supposed to be left for retirement. 👌

All replies

Most helpful reply

BroncosvRabbits(Devotee)Devotee
27 Jan 2025

Hi @andersdeb,


No, you don't have to pay anything to the ATO right here right now, in regards to the Compassionate release of super.


The superfund has confused you perhaps!


If you got all of what you asked for (which is what usually happens with this release), that means you had enough money left in your superfund to cover the 22% tax that's taken out of what's left in there.


For example, you have $50,000 in your superfund, you ask for and get $40,000, the tax will then come out of the $10,000 left in your superfund.


However, yes, you will have to declare that 40+k in your tax return when you lodge, which will push you up into another tax bracket of 30c for all amounts over $45,001.


No, you don't get to claim the tax back in your tax return as you don't have to pay it yourself.


Any early release of super (amounts taken out mostly before 65yrs), are taxed by the superfunds as a penalty/deterrent for using something that's supposed to be left for retirement. 👌

andersdeb(I'm new)I'm new
27 Jan 2025

THANK YOU So very much! I really appreciate your help. It's all very confusing to me and now I can rest knowing I won't have to pay the ATO that amount.

Again, I'm very grateful for your time to clarify this!


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