Covid-19

 

 

1. Giving Individuals Early Access to Their Superannuation

While superannuation helps people save for retirement, the Government recognises that for those significantly financially affected by the coronavirus, accessing some of their superannuation today may outweigh the benefits of maintaining those savings until retirement.

How much can you access if you are eligible?

Eligible individuals will be able to apply to access up to:

• $10,000 of their superannuation before 1 July 2020;
• A further $10,000 from 1 July 2020 until 31 December 2020 (extended from 24 September 2020).

Who is eligible for the early release of superannuation due to coronavirus?

To apply for early release, you must satisfy one or more of the following requirements:

• You are unemployed.
• You are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance.
• On or after 1 January 2020, either 
  • You were made redundant;
  • Your working hours were reduced by 20% or more;
  • If you are a sole trader, your business was suspended or there was a reduction in your turnover of 20% or more.

How to apply for an early release of superannuation due to coronavirus?

Applications for early release of superannuation can be made through myGov. If you don't already have a myGov account, you can set one up by selecting "create an account".

Applications for the 2020-21 Financial year can be made from 1 July 2020 to 31 December 2020 (extended from 24 September 2020). Importantly, if you have previously applied and accessed your superannuation in the 2019-20 Financial Year and wish to access a further amount up to $10,000 in the 2020-21 Financial Year, you will need to submit a new application through myGov provided you still meet the eligibility.

If your application is successful, the ATO will issue a determination evidencing your eligibility which will be sent to your myGov inbox. Importantly you must not access your superannuation before the ATO confirms your eligibility and approves your application.

My application cannot proceed since my SMSF is not recognised by the ATO, how can I apply?

Your SMSF is not recognised by the ATO, usually caused by one of the following reasons:

• Your SMSF was established in the current Financial Year and no Annual Return has even been lodged with the ATO. As a result, the ATO does not have your SMSF information;
• Your SMSF was established in a previous Financial Year but had not transacted until the current Financial Year. Since no Annual Return has been lodged with the ATO, the ATO does not have your SMSF information;
• Your SMSF was established in a previous Financial Year but has one or more overdue Annual Return(s).

In the above scenarios, you need to phone the ATO directly on 13 10 20. The ATO operator will verify your identify and help you to complete the application over the phone. When contacting the ATO, you may be requested to provide the SMSF's name, ABN or TFN, your personal TFN, and if applicable, the reference number detailed on an ATO notice.

My application has been approved by the ATO, do I need to send the outcome letter to ESUPERFUND now?

No. Please retain the approval letter for your own records at this stage. The document should be provided as part of the checklist completion process.

Will ESUPERFUND release my super benefit to my bank account or do I transfer funds myself?

Please note that ESUPERFUND does not have transaction access to your SMSF bank account and we are not authorised to make any payments on your behalf.

Provided your account balance in the SMSF is greater than the release amount specified on the ATO letter, you can transfer cash from your SMSF bank account to your personal bank account.

I do not have sufficient cash in the SMSF bank account, what should I do?

We caution that you can only make a single payment for each application approved. If your SMSF has insufficient cash, you need to convert some investments to cash (i.e. sell the asset and deposit proceeds into the SMSF bank account) and then withdraw the entire amount in one single transaction.

Are there any adverse consequences if I choose to withdraw this payment?

The following table summarises the potential consequences of this payment on your other interests:

What documentation does ESUPERFUND require if I withdraw this payment?

If you access your superannuation under this special provision, you will be required to provide a copy of the ATO’s determination for audit purposes as part of the checklist completion process.

 

 

2. Temporarily Reducing Superannuation Minimum Withdrawal Limits

The Government is temporarily reducing superannuation minimum withdrawal limits for Pensions by 50% for the 2019-20 and 2020-21 Financial Years. This measure will benefit individuals with Pensions (SABP/TRIS) by reducing the need to sell SMSF assets to fund minimum drawdown requirements.

Are there any changes to the maximum withdrawal limits (in the case of a TRIS)?

No. The maximum withdrawal limits (in the case of a TRIS) are still calculated as 10% of the Pension Balance. There is no reduction in the maximum withdrawal limits.

Where can I find my minimum/maximum withdrawal limits for my Pension?

You can view your minimum and maximum withdrawal limits via your Client Portal - ‘Member Accounts’ - 'Pension Summary' tab. The minimum withdrawal limits shown on the Pension Summary are the reduced amounts.

Please note that if you have commenced Pensions in the prior Financial Year, the minimum and maximum withdrawal limits for the current Financial Year can only be accurately calculated after your SMSF's prior year's Annual Returns have been completed.

I have already withdrawn my original minimum withdrawal amount for my Pension, can I reimburse the excess back to the SMSF?

No. If you have already withdrawn more than the reduced minimum withdrawal limit, unfortunately you cannot reimburse the SMSF. Any such amount would be considered a contribution and be subject to the contribution rules. Please visit our website here for more information on contribution rules and caps.

In addition, you cannot forgo making any withdrawals in the following Financial Year.

 

 

3. Will ESUPERFUND’s business be affected by the Covid-19 crisis?

We advise that ESUPERFUND is continuing to operate as normal in these unprecedented times. We understand the COVID-19 situation may create uncertainty or financial pressure for some of our clients. Accordingly should you have any queries or concerns regarding your SMSF, feel free to contact our office via your Client Portal Inbox.

However there have been some issues relating to the third party providers used by our clients (such as CBA, ANZ and the ATO). Accordingly some clients may be experiencing longer than usual processing times for the establishment of their SMSF or for other applications submitted to third party providers. Please be assured that the ESUPERFUND team in conjunction with the third party providers are working incredibly hard to ensure clients applications are processed as timely as possible.

It should be noted that we are also experiencing some delays in receiving important data from our providers which may delay the updating of information in the Client Portal. We appreciate your patience during this time and the ESUPERFUND team will endeavour to ensure that all information is updated in the Client Portal as soon as it becomes available.

Can I claim any Centrelink Benefits if I am affected by the novel coronavirus?

We advise that ESUPERFUND cannot provide advice on social security entitlements. Please visit the Services Australia website - Affected by coronavirus (COVID-19) or contact Centrelink directly to verify your personal circumstances.