Understanding what you can do if you're facing financial hardship

There might be a time in your life where you find yourself in an unexpectedly difficult situation from illness, job loss, changes in family situations and more. If you are experiencing financial hardship at such stressful times, there are options you can consider to help make ends meet.

Depending on your circumstances, your options may include early access to your super, claiming an insurance benefit, or seeking support from government or other agencies.

Severe financial hardship payment (accessing your super early)

Severe financial hardship or distress is when you can’t meet reasonable and immediate family living expenses like groceries and other bills, rent or medical costs.

If you’re experiencing severe financial hardship and meet certain conditions, you may be allowed to access part of your super by making an application to your fund.

Generally, you can apply for one payment in any 12-month period if:

• You are receiving Commonwealth income support payments for 26 continuous weeks; and
• You are unable to meet reasonable and immediate family living expenses.
• The minimum amount you can withdraw is $1,000 and the maximum is $10,000. If your super balance is less than $1,000 you can withdraw up to your remaining balance after tax.
• Withdrawals under Severe Financial Hardship are generally taxed at a rate of 22% of the taxable component if you are under 60.

Alternatively if you have reached your preservation age plus 39 weeks, you can apply to access any part of your super if:

• You’ve received Commonwealth income support payments for a cumulative period of 39 weeks after you have reached your preservation age; and
• You are not gainfully employed (meaning you are unemployed or employed for less than 10 hours a week) when you apply.
• There is no restriction on the minimum or the maximum amount of super you can withdraw.

Find out the eligibility requirements and process of accessing your super early. 

Accessing your super on compassionate grounds

You may be able to apply to the Australian Taxation Office (ATO) for early access to your super on compassionate grounds. These include needing the money to pay for:

• Medical treatment or transport*
• Disability modifications to a home or car*
• Mortgage: to stop the bank from selling your home
• Palliative care: expenses associated with caring for a terminal medical condition*
• Funeral costs: death, funeral and burial of a dependent

*For yourself or a dependent

Other conditions apply. For more information, visit the ATO’s website. 

Important things to consider before accessing your super early

• Super is generally a long-term investment for retirement and withdrawing your super early may impact your retirement income
• All or part of your withdrawal may be taxed
• Withdrawal may impact your other Centrelink benefits
• If you wish to maintain any insurance cover you have in super, you need to keep enough money in your super account to cover premiums
• Consider if it’s right for you and seek professional advice if required

Income protection insurance

You can also check to see if you have insurance cover you can claim on. For example, one type of cover, Rest offers is Income Protection (IP) insurance, designed to help if due to you becoming sick or injured, you can't work for a prolonged period. If you have IP insurance as part of your Rest account, you may be eligible to receive monthly payments to replace a portion of your income, that allow you to continue to pay living expenses, debts and treatment costs so you can focus on your recovery.

Learn more about all types of insurance Rest offer, including Death, Total & Permanent Disability and Income Protection (IP) cover.