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Early Release of Super 2020/21 eligability requirments

Newbie

Views 1142

Replies 4

Hello,

I was working as a contractor for one of the big 4. The contract ended in May 2020 when it expired naturally and was not renewed. Outside of this contract i also have my own self-employed business.
I continue to work on my self-employed business but this too has had a drop in revenue by more than 30%. My overall income for the month of June has reduced by ~80% when compared to every other month in the year.

After the contract ended i applied for early release of super for the 2019/20 financial year under the “redundancy” reason and got the money pretty quickly.

In June 2020 i started interviewing for other positions with the bank and it seems highly likely i will get a new job potentially starting some time in July.

Question
1. Do i need to call the ATO to change the reason for the eary release in 2019/20 from “redundancy” to “total reduction in working hours” I have evidence of the contract ceasing which will show that i am eligable i just dont know if “redundancy” is the correct legal name for contract ceasing and not being renewed like it has been in the past or if it needs to be changed to a reduction in working hours?
2. If i am eligable i would also like to withdraw more money from super in July 2020/21 but i dont know if i am allowed to given i am 99% sure i will likely have a new job soon.
3. Would i also be eligable to apply for early release of super in 2020/21 (even after i start the new job) using the redundancy i had in May 2020?

The condition simply says that on or after 1 January 2020 i was made redundant, it does not say anything about continuing to be redundant when applying for the early release in the following financial year.

Thanks
1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 0

Hi @Nikec92 

 

Certainly COVID has given us many reasons for concern. Its also why the government has made this provision for us to access super early where needed. Our tax system generally is about self assessment with guidelines. So let me try and list what I believe will help.

 

Firstly the intent of the measure is to support people who are adversely financially affected by COVID-19 and need help to meet expenses. However at the same time we are aware of the impact withdrawing super can make if done so without genuine need.So we appeal to Australian taxpayers to approach this accurately and honestly which I am sure you will.

 

In addition to the above, one of the following circumstances must apply. These are some:

 

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). See Eligibility and Assessing your eligibility. The later talks to records to keep.

 

Remember too that this access is available until Sep 24 2020 so if your uncertain now how your current circumstances will play out you are always welcome to come back later and apply. See also Implications of accessing your super early

Thank you for wanting to get it right.

 

4 REPLIES 4

Former Community Support

Replies 3

Hi @Nikec92 

Q1. If you can prove you were eligible (and it sounds like from what you have said, you have evidence of your work ceasing), you would have been entitled to receive your early release of super for 2019/20 financial year. If you genuinely completed the application with the information you thought correct at the time and you have evidence, then you should be fine.

Q2 and Q3. Both of these questions are best answered with this - if you applied in 2019–20 and you're still eligible, you can re-apply to access up to a further $10,000 this financial year. It is the words in bold that you will need to carefully consider about your current circumstance before you apply for another early release of super. If you start a new job then it is pretty reasonable to say that you probably won’t meet eligibility criteria anymore.

Our application tips on early release of super may be able to help you with your decision.

Hope this information helps.

Newbie

Replies 2

Hi Robyn appreciate you getting back to me so promptly, i think we are on the same page regarding question one.

However the other two questions have me somewhat confused. I have signed the contract for the new job, it was suppose to start end of June but has been pushed out (three times already) by the employer, so we are now in the new financial year. The new start date should be 8th July but theres a good chance they might push that out too. Technically i think i am still eligable under the “redundancy/have a reduction in working hour if i apply before starting the new job.

What has me worried is the following statement;

“To be eligable, a citizen or permanent resident of Australia and New Zealand must require the COVID-19 early release of super to assist them to deal with adverse economic effects of COVID19”

I am a permanant resident so thats fine but the words “must require the COVID19 early release” have me a little worried as i am not sure if this in itself is a criteria or if the criteria is the dot points named below the statement.

Although i am likely to be eligable for the redundancy/reduction in total working hours do i also have to prove that i “must require the early release of super? This is very subjective as i know i will not require the money a it once the new job starts. The previous withdrawal in 2019/2020 was to cover lost wages and meet living expenses so im not worried about that.

In essence, although i am eligable to take out the money under the criteria i do not know if i need to meet the requirement of “must require” (To summarise, can i withdraw the super even if i might not need it?)

Thank you, appreciate your assistance!

Most helpful response

ATO Community Support

Replies 0

Hi @Nikec92 

 

Certainly COVID has given us many reasons for concern. Its also why the government has made this provision for us to access super early where needed. Our tax system generally is about self assessment with guidelines. So let me try and list what I believe will help.

 

Firstly the intent of the measure is to support people who are adversely financially affected by COVID-19 and need help to meet expenses. However at the same time we are aware of the impact withdrawing super can make if done so without genuine need.So we appeal to Australian taxpayers to approach this accurately and honestly which I am sure you will.

 

In addition to the above, one of the following circumstances must apply. These are some:

 

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). See Eligibility and Assessing your eligibility. The later talks to records to keep.

 

Remember too that this access is available until Sep 24 2020 so if your uncertain now how your current circumstances will play out you are always welcome to come back later and apply. See also Implications of accessing your super early

Thank you for wanting to get it right.

 

Devotee

Replies 0

Hi @Nikec92 

 

I understand fully where your coming from especially now that the Government has woken up to the fact that some of their legislation has far too many holes in it and can easily be taken advantage of, or easily misunderstood, and this is reflected in the fact that ATO has now implemented their " Intergrity Measures ".

 

Naturally you would think that the COVID measures would have been thought out far more carefully than they have been, but the fact of the matter now is that the Federal Government are reviewing all COVID measures and going to release amendments later this month.  Now this may not affect the early release of super by much if at all so if you want to get in based on the legislation as it stands today becuase you meet the criteria of "made redundant" then you will have to make up your mind as to whether you wish to make an application for the 2021 financialy year.

 

What you can do is to opt to discuss this with higher level ATO officers if you wish, which may assistance you.

You can either phone the ATO on 13 10 20 and request a call back, or you can submit and " early engagement advice request " by following the directions in this link https://www.ato.gov.au/General/ATO-advice-and-guidance/ATO-advice-products-(rulings)/Early-engagemen...

 

I am not sure which process would be the quicker one.

 

Hope this helps 

 

ALL the BESt and STAY SAFE